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Wirehouse advisors who are considering a move to independence ask me the same questions: Will my clients follow me? Can I afford the added costs? Am I cut out to be a business owner?
My answers are always, emphatically, “yes,” “yes,” and “yes”!
But one question, which is harder to answer, is whether the advisor will have enough time to take on the added burden of running a business. While the payout is less at a wirehouse, the wirehouse takes care of things like overhead, HR, and marketing. Advisors often conclude that by staying put, they’ll have more time to focus on their clients.
That’s not the case.
Many advisors have told me they spend more time with clients as an independent than they ever did while working for a wirehouse. A recent study by Cerulli Associates confirmed it: According to the results, Commonwealth advisors spend 58% more time in client meetings than their wirehouse counterparts.
The next logical question then is, how? It comes down to finding the right firm to affiliate with. Here are five ways the right partner can help you become more efficient in independence.
1. Transition
Making the move from employee to business owner is not a small undertaking. In fact, it may be the most time-consuming part of your journey because you’ll need an office, equipment, and perhaps staff, among other things. But the right support can significantly ease those burdens. The firm you partner with should be able to help you find office space, set you up with a structured timeline, walk you through all the steps you need to take, and make sure you attend to the details so you’re ready when the time comes to open your doors for business.
2. Marketing
One of the most exciting things about going independent is that your business is, well, yours. You can come up with a name and brand that speak to who you are and what you can deliver to clients. But where to begin? While naming your firm may at first seem like a fun exercise, it can become a chore if you aren’t able to narrow down the scope of what you do and how you want to present yourself. With the right marketing support, you can get help finding the perfect name, building a brand identity, and designing your website. This can save you countless hours and frustrations and ensure that you have a great brand story to tell.
3. Research, trading, and plan creation
How much time do you spend doing investment research, trading and rebalancing portfolios, and creating plans for your clients? According to the study, our affiliated advisors spend less time on all these tasks than advisors at a wirehouse. If these activities are a significant burden to you, find a firm with research and advanced planning teams that can take the more complex ones off your hands. And look for technology that allows you to simplify trading and rebalancing your portfolios.
4. Compliance
Rules and regulations protect clients. But they’re also there to help guide you in doing what’s best for those you serve. Your compliance team should provide the same type of support. Make sure the one you work with acts as a resource and serves as a guide to staying compliant – and doesn’t become an impediment to doing business.
5. Running and growing your business
You may think the tasks that go into running your practice will take up a significant amount of your time and limit how much you can focus on your clients. But, according to the Cerulli study, advisors across the profession – both wirehouse and independent – spend roughly the same amount of time on administrative tasks. Think about what you’ll need help with. Is it hiring and staffing needs, business planning and budgeting, or growing your business? Maybe it’s all the above. Whatever the case, the right support will give you more time for what’s most important.
Finding your time merchant
Breaking away from your wirehouse isn’t easy. But, with the right firm partner, it will be easier and less time-consuming than you imagine. Independence means you have control over how you run your business and the experience you deliver to clients. You have the freedom to always do what’s best for them. Giving them more of your time is the best thing of all.
Kenton Shirk is Vice President, Practice Management at Commonwealth Financial Network.
Read more articles by Kenton Shirk
Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.
