The Hindsight of 90% of Advisors…


In the financial industry, advisors often find themselves speaking of “trends”. Market trends, investment philosophy trends, you know all of the hot button terms.

But one trend that many advisors, especially those working for the brokerages still don’t discuss, and that’s the trend of people just like them, making the move into the independent space. Whether it’s for better fee arrangements, more freedom to help clients, more diverse options for tools and technologies… every day, more and more advisors are making the move to an RIA, or to start their own RIA.

Whether you haven’t yet considered this move, or have been thinking about it for a while, it might be good to hear that More than 90% of advisors surveyed who made the move from brokerages to the independent world said they would do it again and are happier than they were before. It also helps that 70% noted an increase in their overall revenue.

These figures are all from a recent survey by Schwab advisor survey of advisors who made the move.

The biggest fear that we see keeping folks in the captive space, and one that the wirehouses are happy to perpetuate, is that leaving the brokerage will cost the advisor their clients and they will be starting from scratch. This is something of an urban myth as, according to Schwab’s survey, advisors were able to retain 87% of their clients after breaking away from the firm.

The truth is, most advisors don’t need to solicit their clients, which is good news considering that doing so can have legal implications. Oftentimes, the clients will maintain their relationship with their trusted advisor rather than a brokerage firm who they’ve never actually sat down and spoken to.

Another big fear in the decision-making process is the overwhelming costs and general overhead expense of going out on your own. The general rule of thumb on spending and budgeting for an independent advisor allows for 20% of revenue allocated for variable costs, and 15-20% on fixed. That math leaves over 60% of revenue going to the advisors. Can an advisor at a wirehouse gross 65%? Not likely.

We’ve found, from our advisors who make the switch, that the operational support, fee flexibility, portfolio options, and advanced technology solutions provide for a better advisory experience for both the advisor and the client.

With 90% of advisors glad that they moved out the wirehouse world, we knew that part of our job, as an advisor services and tech firm, was to make that move as simple as possible on them. Our Firewall Transition Process helps advisors make the move with designed, step-by-step actions, and our technology takes the heavy lifting of data migration off the advisors’, and their staffs’, shoulders.

Breaking away and making the transition to independence isn’t easy, but with the right firm supporting you, it doesn’t have to be difficult. Learn more about how we help advisors make the leap to freedom.

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