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Why More Advisors Are Taking the Leap Towards Independence

Investment Advisors go independent

Above all else, client relationships hold the key to success for financial advisors. Fortunately, these can be nurtured from anywhere; no swanky office required. The social distancing this allows for is just one of several reasons many are now choosing to transition within the profession.

If you’re already working independently, consider yourself ahead of the opportunity. As a business owner, you’re in the driver’s seat. Your professional security isn’t based on the security of a large firm that’s weathering pandemic-induced uncertainty; it’s based on your performance alone, and that’s what counts, especially during times of crisis.

Your clients don’t have a relationship with your business. They have a relationship with you. With or without a large firm behind you, you create your own, unique client experience.

Technology is on your side.

New independent technology platforms make it easier than ever for independent advisors to digitize everything from setting up client accounts to managing their portfolios. In fact, accessing these platforms independently is often easier than accessing them as a salaried employee. Why? For many large firms, embracing the newest advisor platforms is too great an investment to make given the volatility of today’s economy; moreover they are locked into legacy technology that absorbs most of their shrinking investment budget. The pace of change can be agonizingly slow in larger firms, where serving the broader advisor force comes at the expense of meeting the needs of individual Portfolio Managers and advisors.

As an independent advisor, you get to choose the platform that best suits your needs. Given how inundated wealth management technology firms have been with enquiries in recent weeks, the need is clearly there, and for good reason. New digital technology gives advisors 100% control over the client experience – and the ability to compete with online offerings.

Lifestyle, earnings, standard of care – you’re in control

How, where and when you work is up to you. You get to build your business around your personal and professional values. You create the culture, decide what your mission is, determine what direction to take your business in, and which clients to work with.

With no management team to be accountable to, you have total autonomy over the products and services you offer with a view to providing the highest standard of care. You set the rules, build the team that fits your needs, and acquire the capabilities that are most important to you.

And last but certainly not least – you determine your bottom line compensation. Every dollar you earn is yours to keep, as is the equity gained through your blood, sweat and tears – equity that you can eventually cash in or pass down to a family member when the time is right.  While captive firms focus on maximizing the grid; as an independent business owner you determine the right approach to maximize cashflow and equity

Being independent doesn’t mean going it alone

Being an independent advisor does not mean you have to run your business alone. There are many resources out there to help manage and navigate the transition and ongoing management of your business.  You can decide which aspects you do for yourself, and which areas you partner or outsource.  Whether its just technology or you are looking for a more fully Outsourced Chief Investment Officer (OCIO) there are new options in Canada to help simplify your business and reduce the risk of transition.  Moreover, there are options beyond complete independence; as there is an increasing trend towards joining an existing independent firm as a partner. This reduces the upfront investment and provides for a smaller step into independence with more support and mentorship to learn some of the business skills (regulatory, branding, P&L management, etc.) before going out fully on one’s own. Longer term if structured properly, it creates option value to stay at the firm or go it alone when ready.

As with all business transitions, timing is everything.

 If you’re ready to take the leap towards independence, reach out to Purpose Advisor Solutions. Our Transition Team will help you weigh up your options and create a plan to ensure your move is as seamless as possible for both you and your clients. Already operating independently? Our experts are here to help you take your business from functioning to flourishing.

Wherever you’re at, we have the technology, resources and expertise you need to succeed.


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