Advisors, have you been wanting to leave your broker-dealer? You’re certainly not alone. Many advisors I talk to and work with have been getting increasingly frustrated with the restrictions and conflicts of interest that come with working for a large company. If you’re making commissions off selling products to your clients, you simply can’t be a fiduciary who puts client interests first. If you’re ready to make a change, it’s important you don’t exchange one restrictive career for another. Simply moving from one broker-dealer to another may improve a few of your circumstances, but it won’t allow you to really take control of your career. To do that, you have to go independent.
Why to Leave Your Broker-Dealer
If you’ve been with a broker-dealer for a few years (or more), you likely have your own personal reasons for wanting to leave. Some reasons, though, are pretty universal. Most of those I coach or mentor are simply tired of making money by selling products to their clients they may or may not need. Instead, they want to be a financial counselor to their clients, helping to navigate them through issues like planning for retirement, maximizing savings, and leaving a legacy for those they love. They know that putting their clients’ best interests first simply does not coincide with commission-based selling. This reason alone is more than enough to make the decision to leave.
Why to Go Independent
There are tons of perks of being an independent advisor. You have a lot less red tape to deal with, you have the flexibility and freedom to create the career that fits with your lifestyle and unique way of doing business, and you achieve the freedom to serve your clients in the way you best see fit. When you’re independent, you can create a fee-based structure that removes the conflict of interest created by commissioned sales and become a trusted partner and advocate for those you work with.
How to Go Independent
Have I convinced you that leaving your broker-dealer and going independent is a pretty good deal? If so, you’re probably wondering what the next steps are. Fortunately, making the change does not have to be complicated or daunting. Here’s what you need to do:
Know What You Need If you’re launching a fee-only independent advisory business, you will only need your Series 65 license. This is a license to act as an investment advisor to your client and, if you’ve been in the industry for a while, you likely already have it. You don’t need a Series 7 as this is a license to buy and sell stocks and receive a commission for it, something you won’t be doing as a fee-only fiduciary. In addition to knowing which license you need, you’ll also need to figure out what type of office you’ll be working out of (at home, remote, or traditional office) and a plan to find new clients. I also encourage advisors to have a business attorney look at their contracts to make sure they are addressing any legal issues that may arise from leaving.
Take a Course Courses like our own Evolved Financial Advisor program are readily available for those who are ready to take the leap and go independent. We provide step-by-step instructions and give you access to groups of other advisors going independent as well as weekly coaching calls to help you through the process.
Get a Coach or Mentor Getting a reliable mentor or coach not only helps you make the leap from broker-dealer to independent advisor, but it also helps you make your new endeavor a success. The mentors I’ve worked with over the years have been instrumental in my growth and I always encourage advisors to have at least two or three mentors they can go to with questions, concerns, or when they just need a little encouragement.
Ready to take control of your future and build the career of your dreams? Leaving your current broker-dealer is step one, but make sure you’re not exchanging one restrictive situation for another. Leave to start your own legacy by going independent today.