What You Need to Know
- Independence allows advisors to serve clients on their own terms.
- Determine which model your want, the risks and your endgame.
- M&A trends indicate independent models are the hottest ticket.
Going independent sometimes can be a scary decision, but it doesn’t have to be. When an advisor has made the decision to build enterprise value in a lasting business, going independent is really the only option that allows for that outcome.
Independence allows you to serve clients on your terms and build the business of your dreams. That’s why it’s critical to consider the full process and make sure you’re in a place where you feel empowered to tackle the monster that is the move to independence.
Here are key considerations to think about when making this decision:
1. Consider all models.
First investigate all options — the only “wrong” decisions in life are the ones that aren’t well informed.
What Your Peers Are Reading
These options include several models of “supported independence” that can help you make the journey to independence in stages and offer guidance. That way, you can focus on the parts of the business that you need to and be more hands-off in areas where you don’t have as much time to be heavily involved.
2. Weigh all risks.
Next, carefully weigh the risks of going independent, as no major business decision is risk-free. There is a risk of lost earnings and clients when making the move, but there are certain conditions that allow you to move clients that truly belong to you over time. And your partner firm should be integral to this transition.
3. Determine First Where You Want To Go
Finally, it is essential to have a clear vision of where you want your practice to go and where you want to be at the end of the journey. Start by being honest about the business you want to build and ask and answer the following questions:
- Are you building a large ensemble practice or a lifestyle practice?
- What independence models support each?
- What are your plans for technology?
- How will you handle succession planning?
- How will you face the challenge of organic growth?
What to Look for in a Partner
Ultimately what to look for in a partner relies heavily on your own interests and competency — a partner should fill the holes in an advisor’s game. If you’re not as strong in a particular area, you’ll want to identify a partner who has that strength.