Why Going Independent Was the Best Decision This Advisor Ever Made

In four years, Innovative Wealth Building has surpassed $500 million in assets under advisement; the goal is to top $1 billion by the end of the decade.

“I’m very confident we’re going to get there,” said Parham, the chief financial officer. "We’re taking a strategic approach to building our business, and our biggest challenge is not chasing every possible shiny object that comes along. Clients continue to seek out our services, and I’m so proud of what we’re delivering.”

Parham, a CFP with a master’s degree in financial planning, shares his advocacy of the independent RIA approach on industry podcasts and through his own social media presence on LinkedIn. He’s also been asked to appear in TV commercials and on billboards for Charles Schwab, sharing his passion for the financial planning profession.

“That’s been another sea change for me and for independent advisors, the ability to kind of integrate our whole selves into our work and break down some of that barrier between work life and personal life,” Parham said. "It's not for everyone, but the independent model is definitely the right fit for us."

Here are some highlights from our conversation, edited for length and clarity:

THINKADVISOR: Running an independent advisor practice has many perks, but it’s also very challenging. How are you feeling about your decision to go independent four years ago?

TERRY PARHAM: It’s a demanding job, of course, but becoming independent was the best decision we could have ever made for our practice. So far, things have gone even better than we had hoped or planned.

But you’re absolutely right. With every new level of success comes new details to manage and more challenges to contend with. In this industry, you never get to some magic AUM number or revenue figure where everything is great and there are no more challenges.

That’s just not how it works, and we need to be constantly evolving and responding to what our clients want and need from us.

A word for the advisors out there: If you are thinking about becoming independent because you think it’s going to absolve you of all your problems, unfortunately, you’re wrong about that. The challenges are different as an independent enterprise, but they continue to come up.

We’ve learned a lot along the way as we have steadily increased in size. When you’re just starting out and you are still small, you can move very quickly and you can do whatever you want to do — but that has its own drawbacks.

It’s easy to say yes and get distracted, because you have this newfound independence and an ability to go in whatever direction you want. Over time, we’ve learned to put up some guardrails and really be judicious about the decisions we are making, so that we are developing the business in a truly strategic manner.

What’s also been fun is the outreach I’ve gotten from people who are thinking about going independent or who have made that decision and now want to talk about it and share their experiences. I’m happy to tell them about what we’ve learned and to give them feedback based on our experience.

What is some advice you find yourself giving to new or future independents?  

It’s really about what I was just describing — the need to be strategic and not chase every shiny object that goes by. Success in the independent RIA space requires a strategic approach to planning for the future and running an efficient, well-structured business with real enterprise value.

Most advisors that become business owners have frankly no idea how to be business owners. They become successful because they are good at working with clients, and they might gain enough momentum and confidence to strike out on their own.

But if your business depends entirely on you and your ability to win and service clients, you don’t really have a business — you have a job.

So, building out the team is so important, as is building out the infrastructure, processes and decision-making capabilities that growing businesses need in order to be sustainable.

Another thing I often talk about is marketing and branding. As an independent advisor, you can’t take these things for granted in the same way you might be able to when you have a big, historic brand behind you.

We did a lot of work on that early on, and it’s paid off. You need to make a concerted effort to make sure people understand what you're setting out to accomplish as an independent firm.

Lastly, I would say that, when we first went independent, I could not really understand why someone like us would join a Carson Group or an Osaic. I’m starting to understand it a little bit more now, and so I tell people that there's no one-size-fits-all approach to independence that is going to work for everybody.

I’ve lived the extremes of complete captivity as an advisor and complete freedom, so now I have a perspective where I can understand everything along the spectrum a little bit better.

What can you share about how you’ve built the leadership team and brought in next-generation talent? Do you think much about long-term succession planning, for example?

Yeah, it’s actually been a very organic process over time, and the key is to really balance people’s skillsets and personalities. We’re fortunate because we started off with an intergenerational team, with Warren [Brooks] and Jennifer [Brooks Hill] being a father-daughter team, so there’s a natural succession plan built in there.

It’s interesting because Warren loves the sales process and meeting with clients, and he’s still doing 10 or 12 meetings a day at age 68.

But we also know that, in the future, Jennifer doesn’t necessarily want to keep up that daily pace, so we have brought in two younger advisors in Coy Baldwin and Tyler Chavel, and we just hired a few other people to bring into the fold and meet our client service needs.

Once again, the key is being strategic and staffing up the firm in a way that will help us evolve over time and achieve both the growth and the personal work-life balance that we all want.

I have an advisor that works closely with me named Carman Kubanda, and I have a 22-year-old brand-new advisor named Zach Senn on my team. So we’re really looking at a three-generation advisor force right now, and we’ve been very strategic about building it that way so that we can continue to support and grow our 1,000-plus family client base over time.

Pictured: Terry Parham