We all dream of going independent. The opportunity to run the show yourself is tantalizing, to say the least. But how do you avoid the potholes that have tripped up so many before you?
While spending years at one of the major wirehouses may have you prepared for part of the job, there are a variety of other details that you have to keep in mind.
First Things First
You have to have your clients’ interests in mind, as a fiduciary, every moment. There’s a serious cost when it comes to meeting an ever-expanding array of client needs.
You’re going to need to be spending lots of time on admin, compliance, and, of course, marketing. And you’re going to need to have a strong group helping you with all of those if you are ever going to do the things that you need to do to be successful.
“Some advisors say that they spend an aggregate average of one day per week dealing solely with compliance issues. Others say that a significant portion of their expenses are allocated for adequate compliance management,” says Investopedia.
Jack Of All Trades
It’s tough to be a jack of all trades, but it’s going to be real tough to go independent if you’re a master of none. Going independent requires you to bone up on everything. If you’re a good financial planner that’s a great start, but you’re going to have to work on your sales skills and figure out how to do administrative work.
In good news, you may find yourself thriving in an area you didn’t even know you were gifted in. Maybe your mind is a natural for marketing and you just never got a shot at it, or maybe you’re a silver tongued soothsayer who could sell Catholicism to the Pope, either way, going independent is going to test your range.
Build A Team
We’ve said it before, and we’ll say it again, you’re going to need a great team around you if you’re going to be successful. You need people to do the things you struggle with or simply don’t have the bandwidth for.
The Cost
Going independent isn’t cheap. Other than the fact that you’ve already given up wages that you’ve grown to count on, there are a bunch of underlying costs to starting a business. Advisors who step out on their own have to consider everything from rental prices and water bills to the cost of technology from computers to new platforms.
You’re also going to need to learn how to integrate multiple computers and what is needed in an office, or you’re going to need to find someone who does. That additional help, meanwhile, is going to cost extra.
You’re moving from cash-flow to equity and you are going to have to examine your own personal worth and your team’s.
