One significant trend that many independent financial advisors in the industry face today is how to run their business without the support of a large firm. They find themselves wearing many hats: accountant, human resources, recruiter, office manager, or any other “hat” that deals with having their own practice or business.
Having many independent financial advisors in the industry is ideal for consumers: growing competition ensures consumers are provided with more customized, client-centric support while offering the gratification, flexibility and rewards of an entrepreneurial business model. Advisors today are better trained and more educated than they were when I came into the industry 40 years ago. Advancements in technology have given way to immediate access to product and retirement enhancement information.
Earlier in my career, a friend who owned an independent securities and insurance agency asked if I could help motivate his sales force. Working with his team, I learned about the industry and enjoyed it so much, I purchased my own agency.
My interest in financial products and my desire to teach and motivate eventually lead me to transform the agency from an MGA to a national marketing company for independent advisors. Our goal was to help our advisors tackle the challenge of running their business without the support of a large firm — which is one of the challenges of being independent. I’ve never wavered in my belief that this independent option is best for both clients and advisors.
Here are three benefits of becoming, or remaining, an independent financial advisor:
- Flexibility to customize products for clients’ needs: This allows the advisor to find the best solution for each client’s needs. Advisors who work as employees for a single financial firm usually have only that firm’s products to offer clients. Those products may or may not be the best solution for them, and often the advisor’s choice is to either sell them the product or allow them to walk away. Having the freedom to choose from a broad array of options allows the agent to tailor-make the solution that meets the client’s unique needs.
- Increasing client confidence by offering clients more choices: There are often a few different ways to meet a client’s needs. Offering a client choices that meet their needs equally, but with varying levels of risk, cost, and other such factors, helps clients feel more confident about their selection. They choose based on what is most important to them.
- Independent business / you’re your own boss: The independent advisor can build a successful business, with a viable succession plan. Advisors working for carriers must rely on savings and any plans their employers offer for retirement. Independent agents, however, are investing in their own success with the goal of a comprehensive exit strategy. That’s a huge benefit. These advisors are limited only by their own desire, work ethic and resourcefulness in their ability to build a valuable business.
There are challenges. As with any entrepreneur, independent advisors have to develop skills that have nothing to do with advising clients about financial products and investments. They have to manage their office, perhaps hire and fire staff and learn to effectively market their business, focusing on what they do best and not becoming sidetracked by the minutia of business ownership. But, by becoming a part of an independent marketing organization, you won’t be in it alone.