One of the most significant findings of those who have gone through the process of evaluating their current business model—looked at in aggregate; anonymity of users’ submitted data on the Evaluator tool is guaranteed—is that while “maximizing my net income” was cited as the prime motivator, the desire for independence was a close second reason—“I want to call my own shots and have control over all aspects of my business”—for exploring the different affiliation models that are available to advisors. The third biggest reason cited by Business Evaluator users is “maximizing client satisfaction with little or no interference” from a third party or parent company.
Business Evaluator is an online application built by ActiFi and modified for use through the AdvisorOne site. Launched on AdvisorOne on June 8, the app, developed by Spenser Segal and his team at ActiFi, intuitively guides the user through exploring a change. Based on user-provided data, the tool creates custom reports and generates recommendations for the user based on their current affiliations, business motivations and sources of revenue.
With an average AUM of $105 million reported by users since the tool was made available to AdvisorOne readers in June, and with average firm revenue of nearly $1 million and 193 clients, the plurality (42%) of Business Evaluator users already describe themselves as independent BD representatives. Of all users, 28% said they were affiliated with full-service BDs, 15% with insurance BDs, and 7% from insurance company broker-dealers.
(Spenser Segal of ActiFi is currently writing a series of blogs for AdvisorOne on the steps needed to maximize advisors’ practice management efforts.)