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    Starting an RIA (Registered Investment Advisor) firm can be a massive opportunity for financial advisors who want to build monetary value in an independent business. While leaving the comfort zone of an existing firm or brokerage may be intimidating, there is no better time to act than right now.

    Let's look at some reasons to go independent, some pitfalls, and finally, some solutions advisors have successfully relied on in the journey toward independence. 

    Why Go Independent Now? 

    Cerulli Associates’U.S. Broker/Dealer Marketplace Report covers eleven reasons that financial advisors prefer an RIA model. We won’t go into all of them, but as of late, three of those reasons have risen to the forefront: client interests, autonomy, and higher payouts. 

    Client Interest

    During volatile markets, investors appreciate financial advisors who go above and beyond to ensure they receive customized financial planning, offerings, and products that are best for them.

    By becoming RIAs, advisors can act as full fiduciaries for their clients. They have the opportunity to put the client's interests first instead of that of a wirehouse or large broker-dealer.

    A smooth transition for clients from brokerage to independent practice requires frequent, clear, and transparent communication. If in doubt, successful advisors put themselves in the shoes of their clients, then think if they would want more or less communication. Usually, the answer is more.


    RIAs enjoy the autonomy of determining their firm's direction and are able to make critical decisions about their own services without running into red tape from other departments.

    The opportunity to create their own business plans and set up personalized services for their target clients in a way that might not be possible in a large firm is a level of control that many financial advisors find attractive.

    Higher Payouts

    With inflation on the rise and the possibility of a recession looming on the horizon, everyone is thinking about ways to increase their income. For financial advisors working with a broker/dealer, dreams of higher payouts or even 100% payouts of independent practices can be very lucrative.

    In addition, the most recent investment management outsourcing study revealed that one of the secondary benefits of outsourcing was the significant increase in personal income, as reported by 91% of advisors who outsource nearly all their share of assets under management (AUM).

    Why Do Advisors Breakaway?

    Cerulli Associates

    Higher payout


    Ability to build financial value in an independent business


    Greater autonomy


    Ability to select preferred technology systems


    Appeal of independent model to clients


    Desire more personable culture


    Potential Hurdles 

    The previously cited Cerulli study outlines some of the most common concerns associated with going independent. However, according to Fidelity Institutional’s Advisor Movement Study, the worry is often over-inflated. In fact, the fears rarely materialize.

    The two most common concerns we hear from financial advisors when going independent are compliance and scaling, each of which is surmountable in its own way.

    How do I ensure consistent compliance?

    One of the biggest questions on the minds of independent advisors is: How do I ensure compliance when I'm on my own? The most common solution is hiring a compliance team or outsourcing to a third-party firm for an easier compliance and audit process.

    When working at a brokerage or large firm, advisors have the compliance support of a large business. Going independent means carrying out compliance responsibilities and performing their due diligence. Although most financial advisors who opt to outsource investment management do so to deliver more and better investment solutions for their clients, 95% of advisors reported easier compliance and audit processes.

    How do I scale my business for growth?

    The entrepreneurial advisor who breaks out on their own eventually asks, “How do I scale efficiently and effectively?” Talking with a practice management business consultant can avoid some of the more common mistakes we see. Here are the top four mistakes:

    1. Hiring too many people
      Hiring the right personnel is key to creating a robust and operational business. However, as demand for services grows, it can be easy to continuously hire to meet that volume of business without thinking about how many new employees may erode the practice's profit margin.
      Additionally, this means you need to manage these new employees. Adding new high-level employees will cost more for your company. It may be cheaper to hire one more qualified team member instead of multiple candidates or outsource to a third-party firm rather than hiring a full-time employee.
    2. Not building an effective Advisor FinTech stack
      Let's face it — technology is expensive. Purchasing the right technology can take a lot out of a new practice's budget, and it may be a while before there is a return on investment.
      Additionally, not all the multitude of financial advisor tech solutions can seamlessly integrate without error. These tech glitches can eat away at the precious time that advisors could be spending with clients. 
    3. Not seeing their own strengths and weaknesses
      When starting an RIA practice, trying to do it all is a dangerous hole to fall into. Advisors sometimes fumble as they attempt to manually handle all front- and back-office tasks and provide white-glove financial services. Advisors who can see their strengths and weaknesses and find the resources that complement and not just supplement their strengths can build an advisory firm that not only stands on a solid foundation but is also more adept at serving the diverse needs of clients, particularly high-net-worth (HNW) investors.
    4. Not marketing
      Signing on clients as an RIA is an excellent feeling. However, it would be naive to assume that clients will continue to sign on without any marketing push. Part of practice growth comes from the investment and effort put into marketing the firm. Once advisors stop marketing their business, growth will likely reach a standstill. 

    While outsourcing with an organization like AssetMark effectively carries many burdens of an independent advisory to free up time for cultivating stronger client relationships (as reported by 93% of AssetMark advisors), it’s not the only solution.

    Some financial advisors prefer a hybrid BD/RIA arrangement, while others prefer joining an existing RIA firm. We firmly believe the best way to explore the various options is to talk with RIAs who have forged the path before. For that reason, we regularly hold events to bring advisors together and often facilitate one-on-one conversations between seasoned independent RIAs and new RIAs who are not working with AssetMark. It’s this network that empowers advisors on their journey.

    Support from Professionals

    The fear of the unknown is always present when starting a new endeavor. Leaving the comfort zone of a large firm or brokerage can be stressful, especially when an RIA practice needs to be built from the ground up. Working with the right people can help alleviate this fear and provide a much-needed guiding light on the journey to independence.

    AssetMark supports advisors in building their businesses and serving their clients so that they may become both a CEO of their own firm and a trusted advisor to their clients.

    1. Investment management
      AssetMark’s flexible investment strategies provide unparalleled guided portfolio and income solutions, a wide range of customizable products, and all with due diligence.
    2. Technology
      AssetMark’s powerful digital solutions are a one-stop spot for you to manage your client portfolios and for clients to stay connected anytime, anywhere. 
    3. Service
      AssetMark services abound, from business consulting to technical support. Advisors have access to experts in investments, taxes, and retirement services, plus a network of top financial advisors.

    From starting a new independent practice or scaling a developed firm to succession planning, financial advisors have the support of AssetMark. To learn how AssetMark helps advisors along the journey to independent practice, reach out to talk with a consultant.

    Tag(s): Growth , Career


    AssetMark is a leading provider of extensive wealth management and technology solutions that help financial advisors meet the ever-changing needs of their clients and businesses.

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