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An Overlooked Benefit of Going Independent: Quality of Life

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In a recent article in Financial Advisor IQ, two reps that left Morgan Stanley, Brian Luts and David Greenleigh, discussed the benefits of moving from the wirehouse to Wells Fargo’s independent arm (FINET). “Our operating margins are still significantly better than when we worked as employees,” according to Luts, who also commented that he’s now netting about 70%. 

David Greenleigh noted that the higher margins allow his practice to work with fewer clients. “At Morgan Stanley, we would’ve had to more than double the number of people we served to reach our goals.”  

Luts’ and Greenleigh’s remarks point to a benefit of going independent that is rarely touted by the channel: making more with less and freeing up your time for a better quality of life. 

The Constant Push at the Wirehouse

No matter how high you climb up the ladder of production, wirehouse representatives always face pressure from branch managers to get to the next level. Last year I was reminded of the top-down wirehouse mentality when I visited a large firm that had both retail and independent reps. At the end of my visit, management shared their thoughts that “…since the markets had recovered from 2009, reps had become lazy and content…” and evidently, it was the broker-dealer management’s job to change those bad habits.  

As an independent broker-dealer recruiter, I was immediately turned off by this comment because in my view, the job of independent broker-dealers is to support their advisors’ practice, not tell them how to run the business or dictate the hours they work. The wirehouse’s constant push for reps to manage more assets and more clients—reps often must have 500-1,000 clients or more—raises the question, “What kind of quality relationship can you have with so many clients to service?” 

Besides the time needed to service such a large number of clients, reps carry the “mental Rolodex” of clients and their needs that continually pop up in their minds, both inside and outside the office.

That constant barrage of information and concerns tests many reps’ ability to be in the moment and focus on friends and family. With the lines blurred, it can get to the point where you wonder if you’re living to work or working to live.  

500 Versus 50 Clients

To illustrate the point, let’s take a look at a favorite independent model of mine. This particular advisor had $85 million of assets and grossed close to $800,000. She had 35 clients that were all wealthy and because she had this relatively small pool of clients, she was able to shower them with attention.  

Besides coming to her for their financial needs, her clients came to her for assistance when they wanted to buy a car, purchase a home and even plan a vacation. They had her cell number so they could reach her any time they needed. Because they felt pampered by her attentiveness, they would refer friends and family who like them, were wealthy.  

She wanted to cap her number of clients at 50 because she felt any more than that would diminish her service level. She worked seven-hour days, four days a week. She traveled frequently and had many activities and interests outside of work. This advisor realized that work is not everything and had achieved balance in her life. 

It’s All About Balance

In her book, “The Top Five Regrets of the Dying” author Bronnie Ware listed regret number two as, “I wished I hadn’t worked so hard.”  One particular case she wrote about was a patient in hospice care named John. He had wanted to travel more with his wife and spend more time together, but he also enjoyed the status his work gave him. He didn’t particularly like the work itself, just the role it gave him in society and among friends. The chase to close a deal had also become a bit of an addiction for him. His wife was desperately lonely for his company in retirement but he kept delaying retirement even though they were both now elderly.

Then, John’s wife developed cancer and was dying; John was forced to retire to care for her in her remaining time. Years later and dying himself, John reflected, “It’s just the chase for more, and the need to be recognized through our achievements and belongings, that can hinder us from the real things, like time with those we love, time doing things we love ourselves, and balance. It really is all about balance, isn’t it?” 

A friend of mine, Keith Mistretta, who recruits the Boston area for Ameriprise, agrees with the premise that advisors need balance in their lives, noting, “True success is achieved when an advisor discovers the right balance between business and personal time. Growing revenue and assets under management are great, but happiness can only be attained when personal relationships outside of work are equally strong. It’s the balance that creates an impressive win for the advisor.” 

The independent broker-dealer channel has a strong story to tell in terms of achieving quality of life and a balanced life. Still, the message the channel conveys is frequently not much different from that of the wirehouses. “We’ll help you get to the next level” or when selling services such as practice management, “We’ll free up to 30% of your time so you can spend more time in front of your clients.”

Make Room for the Millennials

Instead of constantly pushing how to climb the ladder, how about promoting the value of spending that saved time in front of family and friends or pursuing outside interests? My generation, the Baby Boomers, were driven by the opportunity of more income and didn’t mind working long hours to do so. It was the Boomers that coined the bumper sticker “He Who Dies With the Most Toys Wins.” Boomers were loyal to employers. Today’s Millennials are of a different mindset, attracted to the entrepreneurial aspects of being an independent advisor with book ownership but not loyal to employers. 

As the Boomers retire out of our industry, we will need to cater to the Millennials to fill the void. In very broad terms, Millennials are less motivated by money alone and long to be part of something bigger than themselves. They prefer to be masters of their own domain, choosing the hours they work and the clients they serve. They don’t want to be defined by the workplace but are more interested in a balanced life.

For Millennials, it’s important to be home for dinner with a happy home life as well as work life—money is secondary. Our industry needs to refocus in terms of addressing what matters to the Millennials and talk up the quality of a balanced life that the independent channel can offer.  


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