Support for going independent

Inside the RIA ecosystem video series (John Furey)

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Inside the RIA ecosystem.
Advisor Growth Strategies LLC

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John Furey, Principal & Founder, Advisor Growth Strategies

We help advisors in transition with a variety of things, helping them with entity formation, and how to set up your legal team, we help with transition project management, and we also help them essentially build-out their organizational structure and set up their office, so everything you need to start up a new company.

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RIAs have options.

One of the greatest things about being independent now for advisors that are in the independent channel is the ecosystem that surrounds them. And why is it better?  Well, the first reason why it's better is options, there's optionality in independence.

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RIAs have a track record of retention.

The largest concern is, 'Will my clients come with me?  If I go independent and make the move, will they actually transition with me?' And, really, what you need to do for that concern is take stock in 'When I think about my clients and when they think of me, do they see their relationship with me or are they close with me, or perhaps are they more interested in working with the institution?'  But if you've done a great job as a financial advisors, and large teams almost always have, because that's the reason they're so large, you should feel really, really confident that your clients will go with you. 

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The risk may be greater if you stay.

You know, when you look at going independent, what is the alternative?  The alternative could be staying within a large institution. And is there risk there or is there reward there? So I think, from my perspective, the benefit of going independent, perhaps… and there's risk in doing so, is a better environment versus staying, because in large institutions now they're evolving and they're changing, and really where those firms are going is more into a structure where it's, perhaps, a bit more top-down from an advisor perspective, because we hear that, and it's also a thought of perhaps the way I want to work with my clients in the future, I may or may not be able to because of either a compliance construct or a management construct. So I think advisors, especially the larger teams, are now taking a look at that and saying, ‘Wow!  You know, sure it may be some risk to go independent, but perhaps the risk is greater in staying.

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Information as of November 16, 2017.

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BRIAN HAMBURGER: Through MarketCounsel, we consult with investment advisors, and those who are looking to become investment advisors. We talk to them about the movement into independence, and how to create an investment advisor. We talk to them about building of businesses and recruiting of new talent to the firms. We talk to them about protecting the firms once they have it built, and to gaining efficiencies. And then thereafter, we talk to them about where the firm is headed and help them with strategic issues.

Now the folks who are really intrigued by independence aren't only those that dreamt of entrepreneurship, but they now include those that were willing, are willing, to be entrepreneurs. They're willing to be entrepreneurs because it means something better for them, for their teams, and primarily, at the end of the day, it means something better for their clients.

But when advisors are coming to us, they're not coming to us as a blank slate. They are coming to us packed with questions, and information, and unfortunately, a good deal of misinformation. And so they're coming to us and they're saying, "So here's what I want to do and here's how I want to do it, and here's when I want to do it." And we're saying, "Timeout. Timeout. Let's start with the end. Close your eyes and what does this look like at the end? What does this look like to your clients? What does this look like to your team? How are you making this announcement?" And we'll work backwards. We've done this before. We can draft off of that experience, and we can get you there. But you're not going to direct this movie. This is one that we have to direct. You just tell us what you want it to look like.

The one thing I wish that advisors looking to become independent really understood is that they sit in a really unique position to take decades that they've spent in a really meaningful career and just leverage that to the hilt. Finally, turn that into being an expert in your craft to being a business owner that's able to make decisions that impact a team. Being part of a group who are making investment decisions not based upon what a firm says is available to them, but out of the entire spectrum of investments, and securities, and non-securities. And being able to sit in front of clients and say "We built this firm. We built this firm so that we can act in your best interest so that we're not riddled with the conflicts that are just inherent in a large organization involved in multiple business lines."

It is a bit of a rollercoaster ride. You are in for some of the most exhilarating and exciting times that you've had. Some of our...you know, many of our clients will come back and report to us that they felt their heart pumping again, that they finally reinvigorated the passion they had for the business. They felt that they were resetting and doing what they loved, but now for all the right reasons.

ERIC CLARKE: Technology is impacting the RIA movement in a big way. You know, historically, technology has been viewed as the great equalizer, and so as technology has improved, advisors are finding that they're not only able to get similar technology when they go independent, but now the technology in the independent channel has exceeded the technology capabilities within their existing firms. So as they go independent and they're thinking, 'Okay, I've got to have technology that's on par with my current situation,' they're finding that the technology that's available to them allows them to deepen client relationships, grow their business, and expand their opportunities.

Advisors are finding now more than ever, not only is the technology available and accessible to them, but they can implement that technology easily within their firm. I think that the best non-industry example of that is Apple with the iPhone. You know, it's very simple, very easy to use, and we've used that really as a model and a prototype for our business to say what can we be doing to not only improve technology, improve use cases for our advisor clients, but also make it really easy for them to use and implement within their firm?

And I think we're just on the cutting edge of seeing how technology can make investment portfolios more transparent, and bring together the client experience, bring together not only information about portfolio valuations, but also bring to the forefront how clients are doing in relationship to their financial planning goals that they've established, how they're doing in relationship to the income needs that they'll have during retirement. Bringing all that information together and making it accessible right at the client's fingertips is of absolute importance, and we're seeing that happen today, but we're going to see more and more of that as we move into the future as well.