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Practice Management > Building Your Business

Going Indie Isn’t as Scary as It Seems

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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.

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.

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To find that person, take a close, critical look at your own practice. Identifying the areas where you’re solid and where you need support makes it much easier to identify a partner who will be a great complement to a practice.

Industry Trends’ Impact on Independence

As advisors and clients embrace digital interactions and get more comfortable in a remote and paperless environment, it has become table stakes for even the smallest independent advisor to have an effective and easy-to-use interface.

Often, it’s best to rely on a platform partner for the delivery of this critical piece of infrastructure. Managing technology, like operations and compliance, is a non-revenue generating activity, and is therefore best left to an outsourced partner.

Another area impacting this movement is the increase in M&A activity and the expanding multiples of fee-only practices over the past couple of years.

Although much of this activity is moving upstream toward the mega advisors, private equity clearly has identified that the independent RIA model (fee-only, fiduciary, non-conflicted) is the superior one. You are wise to consider moving toward an independent arena where you are free from the limitations and conflicts of the wirehouse world.

Don’t let going independent scare you. Fully thinking through the decision and answering key questions that will shape the vision of the future will show that going independent isn’t quite the monster it appears.


Matt Regan is president of Wealthcare Capital Management, a fee-only and a hybrid SEC-registered investment advisor that also provides an investing platform featuring investment management and oversight.