The Psychological Trajectory of Advisor Entrepreneurs

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The danger is not to set your goal too high and fail to reach it.
It’s to set your goal too low and reach it.
Georges St-Pierre

Having spent the past seven-plus years working closely with entrepreneurs in the independent wealth advisory space, it is apparent that their psychology follows a relatively defined path. Since entrepreneurs, by nature, are more risk-accepting, there are some deviations. However, there is a psychological arc that aligns with their decision-making and thought process.

The purpose of this article is to explore that arc and to provide best practices for advisors to consider as they pursue their entrepreneurial path.

Stage 1: Bravado, misconceptions, and taking the leap (pre-launch to one year)

Financial advisors have one of the most challenging jobs in wealth management. They attempt to bring a sense of meaning and control to something (the capital markets) that cannot be controlled. Clients entrust advisors with the most valuable aspects of their financial well-being, including long-term savings and their retirement aspirations. In turn, the advisor is to grow and preserve those assets and to help their clients meet their goals and objectives. The intersection between controlling the uncontrollable and the gravity of their responsibility creates a limited ability to be vulnerable.

As an entrepreneur, it is incredibly important to be vulnerable and acutely aware of your own strengths and weaknesses. An advisor leaving a traditional financial institution must take on a whole new set of challenges when starting a registered investment advisor (RIA). Setting aside elements that could be related to their current position, like financial planning technology or CRM systems, the advisor-owners will now need to help their employees select benefits, perform a trademark search for their new name and negotiate leases for their office space.