Independence? 8 Steps to Aligning Your Aspirations with Reality

It’s OK to want to stick with “tried and true” so long as you remain faithful to yourself, your clients and your goals.

Hardly a conversation with an advisor goes by without discussing the desire to go independent. Having heard a lot about it – the freedom, flexibility, better take-home pay and the ability to build a true enterprise – many are sure that independence is for them. Yet, sometimes after digging deep, meeting with appropriate representatives, and really getting into the weeds during the due diligence process, some advisors reach the conclusion that – for a variety of reasons – what they thought they wanted doesn’t align with what’s ultimately practical.

The truth of the matter is that while independence may be where the puck is heading for a swath of the advisor population, it isn’t for everyone. To be sure, watching high-profile teams leave the employee world has fueled many an advisor’s desire to explore. But, when the rubber meets the proverbial road, some get to a point where they say to themselves, “This isn’t really what I thought it would be,” or “I thought I wanted to be a business owner, but I realize I am much more comfortable as an employee in a turnkey environment.”

An advisor named “Robert” contacted me to explore opportunities outside the wirehouse world where he spent almost two decades. “I really want to go independent. I am so frustrated by my firm’s increasing bureaucracy and the marginalization of advisors. And I’m feeling worried all the time that the slightest misstep could get me terminated. I want to retake control of my professional life.” So I guided him through the due diligence process with a focus on a variety of independent models. After an almost 3-month listening tour, he concluded, “Nothing seems quite right.”

With my help, Robert came to realize that while he was indeed mightily and justifiably frustrated by the limitations placed on him by his firm – and it seemed at first blush as though independence was the appropriate solution – it was not the utopia he thought it would be. By applying rigorous self-honesty, Robert acknowledged that he did not have entrepreneurial DNA, he was not excited about managing a business, and he was most comfortable in the “big firm” world. And the thought of making a move with little-to-no transition money was a complete deal-breaker for him. Certainly, the long-term benefits of independence and superior take-home economics were appealing, but Robert was more about immediate payoff.

Is it wrong to “change your mind” on the objective you originally set for yourself? Absolutely not. Is there a way to better align your goals and desires with the reality of the landscape? Indeed there is.

Knowledge is power and so the more you learn about your options, and the more self-aware you can be, the quicker you will come to the conclusion that is right for you.

So what knowledge do you need to gather in order to align your goals and aspirations with the opportunities that exist?

Start by being honest with yourself about the importance of short-term financial gain. With significant recruiting packages still being offered in the brokerage world, how willing are you to give them up in return for building equity, legacy and tangible enterprise value?

Do you have the goods that it takes to be a business owner? What it takes to be a good advisor doesn’t necessarily equate to being a successful entrepreneur.

How entrepreneurial do you think you are? Everyone wants more freedom and control, but how much autonomy do you want or need? Do you like being with a big firm, in a plug and play environment? Or do you prefer the ability to essentially build it yourself?

How do you want to live your business life? What is your inner GPS – your gut – telling you? What would feel soulful and most meaningful?

How long is your runway? How many more years do you want to work and what are your succession plans and goals? (Without at least 5 years on your professional horizon, independence is often ruled out.)

How confident are you with your pipeline and growth trajectory? Understanding what your earning potential looks like will help you better prepare for your future.

Get educated. Read, research, listen, watch, explore. Before you expend any energy on due diligence, be sure you are clear about the industry landscape and the versions of independence and quasi-independence that you may not be aware of.

Talk with an objective consultant or someone you trust who can help you connect the dots between the options available and your goals, timeline, needs and realities.

Ultimately for Robert – and so many other advisors like him – the real conundrum is less about going independent and more about answering the question: “Is where I am the best place to serve my clients and my career?” And that question can only be answered once you fully understand what it is you are looking to solve for and how that aligns with the options that are available.

While independence may be the answer for many advisors, it’s not for everyone. Truth be told, it’s absolutely OK to stay in a “tried and true” world where you feel more comfortable – and able – to serve your clients and future best. And that’s what matters most.