A real-life independent advisor transition story: Jane and her team

Transition

A real-life independent advisor transition story: Jane and her team

The key to independence isn’t running your business all on your own – but running it on your own terms. While making a transition to independence will require a change in mindset as you transition from an employee structure to owning your own business, this structure does offer a number of benefits for entrepreneurial-minded advisors.

The key to independence isn’t running your business all on your own – but running it on your own terms. While making a transition to independence will require a change in mindset as you transition from an employee structure to owning your own business, this structure does offer a number of benefits for entrepreneurial-minded advisors, including:

  • Complete professional freedom, utilizing as much, or as little, support from your broker/dealer as you need
  • Payouts from 80% to 100% (this will typically vary depending on your mix of business and production level)
  • The ability to control your expenses, selecting your own administrative benefits and services
  • Complete control over the future of your practice, including the option to sell your book of business to another advisor upon retirement.

For Jane, a producing manager at a major wirehouse firm, concerns about the financial health of her firm’s parent organization and what she describes as a “lack of moral compass” within the corporate culture led her to consider a move to independence. Before her transition, she managed a team consisting of four advisors and three support staff while also overseeing $100 million in assets for her own clients.

During the due diligence process, Jane and her team considered a number of employers and business models, including LPL Financial, Charles Schwab, Fidelity, Commonwealth and Raymond James. “As we got more information, Raymond James stood out as a clear leader,” says Jane. “We were attracted to the ethical background and history of the firm and liked that client service was the top priority.” They ultimately decided to join Raymond James as independent advisors.

The team expected to bring more than 80% of their client assets from their former firm and ended up moving about 92%. As part of the transition, they began moving to a discretionary format, which their clients have embraced. “Clients don’t want to make stock-picking decisions, and they’re thrilled to delegate that responsibility to us,” says Jane.

Jane’s team now hosts quarterly seminars for clients offering current market updates and meets with every client in person twice a year. “We have a lot more face time with clients than we did before because we’re not spending all of our time on the phone confirming trades,” she says. They like the flexibility being an independent advisor allows.

Jane offers the following advice to advisors who are thinking about making a career transition: “When you’re starting a new business, only take on that which you feel you can effectively handle. And do the things you’re taking on well.”

For most independent advisors, a typical transition timeline ranges from six to nine months of combined due diligence and general planning before resigning from their previous firms.

“The culture here is totally unexpected after you’ve worked in a wirehouse. You genuinely become friends with the people you work with,” says Jane. “And the lack of emotional stress of working compared to a wirehouse is huge because we trust the company we’re working with.”



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