One of the best decisions I’ve made in my life (so far, anyway) was to break away from a captive brokerage firm and go independent. Partnering with Commonwealth Financial Network® has made that decision all the better.
In this guest post, Commonwealth Managing Principal Andrew Daniels discusses "4 Reasons Wirehouse Advisors Should be Making the Move to Independence". Although this is written from the perspective of the investment advisor, I believe many clients themselves will find value in a "behind the scenes" look at the independent model, the benefits to the advisor and ultimately, to you as a client. Take it away Andrew!
Independence Day is one of my favorite holidays. Although the experience will undoubtedly be different this year, I love the tradition and the opportunity to gather with friends and family. And, of course, I love the meaning behind the day: celebrating the birth of our nation and the values we hold dear.
With celebration comes a lot of reflection, too.
I find myself thinking about what independence represents to us at Commonwealth and to the advisors we serve—and I find myself wondering why others are hesitant to make the move to independence. After all, I’ve spent the better part of my career in an environment designed to help individuals pursue their own vision of success and thrive while doing it.
With all that’s happening in our country and our world right now, I daresay many are thinking about the ideals of freedom and independence more than ever, and we’re having conversations that are long overdue.
For now, though, I want to limit my focus to how those ideals might translate to breakaway advisors in four fundamental areas.
1. Independent Doesn’t Equal Alone
Historically, advisors in a captive environment were led to believe the independent model couldn’t measure up in terms of infrastructure, expertise, and support—and that in making the move to independence they’d be alone managing their business. That isn’t so. In fact, the captive model isn’t evolving in the same way or at the same speed as the independent model.
Today, wirehouse advisors who make the move to independence with Commonwealth can expect solutions and support that surpass the advantages of a full-service firm in every way, including product open architecture, integrated technology, quality research, a deep bench of consultative experts, and quality service to back it up and support them at every juncture.
If you have the entrepreneurial drive to make the leap, the infrastructure is here for you.
2. Transition is Something You Don’t Have to Fear
Not surprisingly, the prospect of transition can be a deterrent to many wirehouse advisors going independent. It’s a business- and life-altering step that requires work and commitment.
And, even if you’re ready to make the leap, fear may be stopping you, ranging from whether your clients will follow you and their assets will transition smoothly to the countless details of the process.
Sometimes, though, fear of the unknown is more overwhelming than the reality—and the reality of your transition experience comes down to having the right partner. This kind of move is a once-in-a-career experience for you. At Commonwealth, it’s something we do daily.
We have more than 30 experts across the firm, handling every detail of every single move—and advisor satisfaction with transition is measurable (at 97.8 percent)* and real.
3. Investing in Your Productivity and Long-Term Value
In the captive world, investments made by the parent company are generally for the long-term value of their business, not yours.
Here’s where the real distinction lies: In the independent channel, and particularly at Commonwealth, the symbiosis between you and us is critical—we simply can’t and don’t ever lose sight of the fact that we need you for our very survival. And, in Commonwealth’s case, we’re not only independent; we’re also privately held. This means we’re free to allocate resources toward opportunities that pay off by helping you grow now and in the future—which ultimately benefits us and you.
Take technology, for example. Our technology platform was created in-house and built with direct input from our advisors to ensure that it works for them. And, with our staffing—a roughly 2.5–1 advisor-to-staff ratio—we can optimize the support you receive, so you can spend more time with your clients.
4. Freedom Is About Choice
Freedom and independence aren’t entirely interchangeable—and in a captive environment, you simply can’t experience freedom the way you can in the independent channel.
What I mean by this is having the freedom of choice to follow your own path—and change direction as you see fit.
With independence comes the freedom to choose the kind of advisor you want to be, the type of business you want to pursue, and how you want to serve your clients. Many advisors who join Commonwealth start out dually registered with our RIA and our broker/dealer simply because they’re at that stage in their businesses. When they choose to move to a fee-only model, they’re able to do it right here, and seamlessly, without having to convert any of the underlying infrastructure or tools.
Having the choice and flexibility to change your spots without changing your partner allows you to build and nurture the sort of business and client relationships you envision, and on your timeline.
This Year, as You Celebrate Independence Day ...
I’ll leave you with food for thought as you enjoy your own traditions with family and friends.
If you’re thinking about breaking away from your parent company, keep this in mind: The character and culture of the partner you choose matters. That partner should support the evolution of your business, not the other way around.
On a more personal note, 22 years ago I was fortunate enough to find a home where individuality is celebrated, people come first, and “quality and community” are cornerstones, and not taglines.
From where I stand, independence has never looked better.
*Advisor satisfaction based on average service ratings provided by Commonwealth advisors during transition feedback sessions.