New Possibilities Opening Up For Independent Advisors
A common scenario for financial service producers is to enter the business in order to have unlimited opportunity and control their own destiny.
As they become more successful, it becomes a mantra around which compromise is difficult. This is understandable. Many of us entered the business not because we were innately attracted to it, but because the alternatives seemed so limiting and “boxed in.”
So, while the learning curve in financial services is steep, the feeling of independence and opportunity is satisfying and ultimately rewarding for those who stick with it.
Many of us started with host organizations as part of a captive field force. It provided us with the initial training and eliminated the need to deploy capital which most of us didnt have available. Frequently, for successful producers, that relationship, while important, was also a source of tension. The perspective was that the company wasnt providing everything we needed and the very independence that we craved was cramped by the company imposing its will upon us.
As co-developer and former managing partner for M Financial Group, our premise was that a producer who chose to be independent could become more successful with a group of other like-minded independents than as a captive. In the early days, it was a leap of faith to join us. Twenty years later, these successful individual producers are part of a multi-faceted firm with multiple producers, professional staff, and several lines of business.
Now, given the size and presence of independent firms in the market, a different set of questions has emerged.
How do you continue to attract and select new talent, how do you create continuity, how do you provide transitions for older principals or those wanting to leave the firm? In addition, how do you take advantage of new opportunities such as acquiring another firm or starting a new line of business? Ultimately, how do you maximize distribution value and provide liquidity without breaking up the business?
Historically, access to capital for entrepreneurial firms has not been an easy proposition, nor is advice on the subject. If you were to go to an investment banking firm, it would generally not be interested. So, what do you do?