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Why might an advisor leave a large firm and branch out on their own? There are many benefits of going independent, from more freedom and control to increased compensation. But several misconceptions about going independent leave advisors fearful about making their next career move.
One of the biggest misconceptions is that you'll have to do everything by yourself. Of course, starting any new business requires the owner to be skillful at many disciplines. But joining an RIA with a robust platform is an ideal way to ensure that you have the support you need. Think about it as the best of both worlds; you retain your autonomous brand, yet you have the support and resources of a larger organization, allowing for a balance of workload and efficiencies.
Here are some of the most common challenges faced by new RIAs, as well as explanations of how those platforms can serve as the solution:
1. Time
When you're trying to juggle numerous responsibilities, there isn't enough time to get everything done. One of the main pros to choosing an RIA platform is the option to outsource key functions that you don’t have the resources to cover. Passing off certain responsibilities means you will have more time to spend focusing on how to better serve your clients.
2. Compliance
Compliance is another roadblock that advisors must face if they choose to break away from a firm and start their own RIA. The compliance process takes significant time, effort and money that many advisors don't have. A major perk of choosing an RIA platform is compliance coverage, including oversight for registration, marketing, compliance documents, and more.
3. Marketing
Marketing is the most important aspect of launching a new firm; without the right clients, even the best advisors can't succeed. Any marketing plan should include determining your business’s voice and message, building brand awareness, defining your target market, and implementing marketing strategies. New RIAs should hire a marketing manager or firm to design and implement their strategy. But this is costly. Networks often provide marketing support, including marketing coaching, resources you need to scale your business, and opportunities to discuss growth.
4. Efficient technology
A solid technology infrastructure is a foundation for your firm and is crucial to the long-term sustainability of your business. Necessary technology you will want to have in place for you and your clients includes a CRM system, a financial planning software subscription, electronic client invoicing, streamlined billing features, and 24/7 IT and tech support. While this is a lot to handle on your own, RIA platforms take this concern off your plate, providing you with the software you need to streamline and grow your business.
5. Portfolio management
Effective portfolio management is another area of the RIA business that requires a great deal of time, care, and resources. A stockpile of portfolio management resources can help to create efficiency in your business so you can focus on your clients’ needs. Many RIA platforms offer solutions that help take the research and guesswork out of this time-consuming task, from portfolio implementation support to access to custodial relationships.
6. A support system
The most valuable service that an RIA platform can provide is the collective wisdom of a collaborative support system. As solo firm owners, it is easy to feel isolated and disconnected, but as a member firm in a financial network, you will have a group of financial professionals you can reach out to for resources, knowledge, and support.
Ultimately, the fear of being on your own shouldn't be the reason you hold out on your dream of running your own RIA.
Bridget Grimes and Katie Burke co-founded Equita Financial Network out of a need to fuel business success while empowering other women in the financial services industry. Equita became the first platform solely focused on women-led financial planning firms, designed to encourage women to make the leap into launching their own practice and provide solutions to support them every step of the way. And importantly, Equita is a way for like-minded women to not only share resources and run their business at an affordable cost, but to also share ideas on everything from best practices to help with questions regarding client issues.
At Equita Financial Network, we provide female financial advisors with the resources they need to thrive, rather than settle. If you are a solo firm owner interested in joining an RIA platform of supportive and collaborative women, reach out to us today.
Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.
