One question that seems to come up with regularity is, “Should I become an independent advisor or remain with my current employer?” In this post, we will discuss this issue and the key ingredients you should possess to help assure a long and successful career as an independent advisor. 

Let us assume you are working for a large brokerage firm or bank and are considering taking the leap to independence. What are the chief concerns? If you stay, you may enjoy a measure of security, depending on how you are compensated (e.g., salary and bonus versus commission). Working with a large, name-brand firm may have advantages. There are also disadvantages. On the positive side, people may recognize the company’s name, especially if the company advertises. However, this can also be a negative since some people don’t trust large firms. When I watch television commercials from these large companies, I sometimes wonder if anyone actually believes what they are saying. Although there may be elements of truth in the ad, there is usually a tremendous amount of hyperbole.

What qualities or characteristics are essential for an independent advisor? This is the most important issue. First, you must truly care for the client and their needs. If your focus is on yourself and how much money you can make, you may do well, but in the long  term, it is likely you will not succeed. Above all, you must act with full integrity at all times and in every decision. You should never put your interests ahead of your clients’, even if you are a broker and your legal standard does not require this. 

As an advisor, you can follow one of two paths. You can try to sell as much product as possible to your existing clientele or you can put their interests ahead of your own in every decision you make. The former may generate a sizable income, but the latter will serve you best in the end. Why?

I learned this lesson from Zig Ziglar several decades ago. He said he liked his dentist because his dentist does not perform unnecessary work on him. He went on to say that, his dentist knew that he (Zig) could refer more people to him and fill the dental chair and the dentist would make much more money that way than he would make from performing unnecessary procedures on Zig.

I address this in my firm’s mission statement when I say that if you follow the path of integrity in your business, the money will follow. In short, our earnings are the result of how well we do our job and how honest and trustworthy we are. It is like the mantra from the movie Field of Dreams, “If you build it, they will come.” I say, “If you are honest, ethical, competent and accessible, they [the clients] will come.” 

In the final analysis, our reputation is really all we have. If you do not have a good reputation, then your chance for long-term success as an advisor is low. Therefore, if you are considering making the leap to independence, examine yourself and if you believe you possess these qualities, then go for it.

You may be glad you did. 

Thanks for reading and have a great week!