How I Became an Independent RIA financial advisor podcast

Wondering how to become a Registered Investment Advisor (RIA)? This original podcast series from Schwab Advisor Services™ hosted by Jerry Cobb shares stories of how investment advisors conquered uncertainty on their journeys to success.

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An investment advisor listens to the new Schwab podcast, How I Became an Independent RIA.

Taking the Leap: Starting your own RIA firm >

Jill Reitmeyer, Nancy Mercado, and Dustin Bench felt limited at their previous firm. None of them possessed a sense of ownership or fulfillment in their day-to-day work. They couldn't help asking, "Are we really living up to our potential?"

Learn how the team pushed through discomfort to pursue a world of new possibilities by forming their own Registered Investment Advisor (RIA) firm.

Listen below or on your favorite podcast player: Apple Podcasts, Google Podcasts, Spotify or copy to your RSS reader. If you're new to podcasts, check out our tips for listening to podcasts

podcast 1

Read the transcript

Dustin Bench: I remember waking up at 3:30 in the morning, I was worried about letting Jill and Nancy down because at that point I was thinking, "Oh my gosh, you know, I feel like I brought them down this road and what if it doesn't work?"  And that was the first time my confidence wavered a little bit.

Jerry Cobb: Meet Dustin. At that time, he was a successful investment advisor at a large wirehouse firm. And he had decided to leave. To strike out and start his own firm, as an independent Registered Investment Advisor. And honestly, it wasn't the risk that was costing him his sleep. It was the fact that he felt responsible for his two closest office partners, Jill and Nancy, who were leaving with him. What if the plan didn't work?

Dustin Bench: I thought, "Oh man. I could be ruining everybody's lives."

Jerry Cobb: What he didn't know at the time, was how much faith his partners had in him. He didn't realize how the power of having a team is what would help them succeed.

Welcome to your insider's guide to becoming an independent Registered Investment Advisor, or RIA.

I'm Jerry Cobb, Senior Business Consultant at Charles Schwab, and this is How I Became an Independent RIA, an original podcast from Schwab Advisor Services.™

Speaker 1: You get to the point where you're like, "You know what, the risk I can take to leave and be independent is absolutely worth it."

Speaker 2: I felt apprehensiveness, nervousness, but yet excitement.

Speaker 3: You know that you can see the light at the end of the tunnel.

Speaker 1: Really everything we wanted was possible.

Speaker 2: Even when it's hard or more than you thought, you still got to do it.

Speaker 2: Everything that stopped me from taking that next step was just fear and that fear was in the way of me actually being fulfilled.

Speaker 1: Complete freedom and happiness has been the result.

Jerry Cobb: Advisors often take different paths to independence and find success. Some choose to go independent as individuals, while others prefer to start a firm with a team. Today, we'll look at how the independent RIA firm, Altus Wealth Group got off the ground. It's a story about the role a team played in inspiring a successful transition to independence. We'll also check in with an expert on big transitions and the power of partnership. And, as always, we'll get a little practical advice, and bust a few myths about the RIA journey. So you can learn from others as you consider your own path forward.

So let's start with a decision that almost didn't happen. Let's start with Dustin.

Dustin Bench: My income is higher than most people. I've got two kids and a wife and a house, and we're doing the American dream. And it is beautiful and it's great. I go to work. I come home.

Jerry Cobb: Dustin is describing what life was like, working at an investment firm in Colorado Springs. He was in his late 30s, and had been with this company for over 15 years. Work was predictable, the money was good. Life was great.

Dustin Bench:  It felt like we could keep along that path for ever. And that was fine. You know, that was one way to live.

Jerry Cobb: Most of Dustin's work he did with two other senior financial advisors. Nancy and Jill.

Jill had been at the company for most of her career. 

Jill: You know, I had been there for 30 years, and so I always thought I would stay there, I would retire there.

Jerry Cobb: The same was true for Nancy.

Nancy: I never thought that I would be jumping ship, let's put it that way.

Jerry Cobb: But as the months and years ticked by, something intangible started gnawing at them. Sometimes they'd talk about it.

Dustin Bench: Jill, Nancy and I, several times we had this conversation, like, well, are we. We're happy. We're all making good money. Our clients are happy. The other side to it was, am I really living up to my potential?

Jerry Cobb: Over time, the team's priorities shifted. Jill, for instance, bought a house in Michigan—pretty far from the Colorado office. She dreamed of working remotely. But company policy meant that dream would be next to impossible.

Jill: You know, I was being given a lot of restrictions, which really made it such that I couldn't work for the clients and do everything that I wanted and needed to do with them remotely.

Jerry Cobb: Nancy also wanted more freedom. She was a seasoned advisor but felt like she was being treated like a novice.

Nancy: I understand that large wirehouses have to protect their business on all levels, but there should not be a need to have chains or restrictions that you can't do this and you can't do that, and I think more than anything that's what I started to experience.

Jerry Cobb: Their frustration mounted. All they knew was they wanted more. They wanted something better.

Dustin Bench: And it became ridiculous to us to the point where you're like, "You know what? I'm in a place where the risk I could take to be so much better is absolutely worth it."

Jerry Cobb: They had no idea what options existed for them. It was a vision but without a plan. Dustin started some initial research. He learned about hybrid models, independent broker dealer models. He explored opportunities at other wirehouses. But every time he came back to the team, they'd agree that it still didn't feel right.

Jill: So here's what I will tell you will be the shift for me.

Jerry Cobb: A day came when a package landed on Jill's lap. It was a standard marketing mailer any advisor might receive. And in it, it explained the RIA business model and how it worked.

Jill: I handed it to Dustin.

Dustin Bench: She didn't want to hand it to me, but I was kind of the designated person and she knew I was frustrated.

Jill: And I said, "If ever we were to do anything, this would be the platform that I would consider."

Jerry Cobb: And with that, he was off. Dustin rolled up his sleeves and learned everything he could about the RIA model.

Dustin Bench:  I had lots of meetings with attorneys, with compliance people, with technology people and all the aspects that make the business run.

Jerry Cobb: And, the more he learned, the more information he brought back to his colleagues, and the more excited they became. 

Nancy: When Dustin started talking about it, I knew that, okay, I have got to open my mind to this and learn.

Jill: He was excited and had all kinds of information. Just very motivated. 

Jerry Cobb: It was time to make a call. Stay? Or go? Dustin was out in his truck when Jill got him on the phone.

Dustin Bench: And it was about five thirty or six o'clock one afternoon. It was in the fall. I remember I was headed—I live up in the mountains and so I'm driving up, and I knew there was a dead spot ahead of me, but we were in this conversation of, "Oh yeah. This is a great idea." I mean, kind of rehashing what we had already talked about. I thought, "I'm going to pull over and we're finishing this tonight." So I pulled over and I skidded on the side of the road. This dust is going all over. And my first question is, "If we're going to do this, let's pick a date." Sort of silence for a second because I thought, "If we don't pick a date, then it's not real."

Nancy: The only thing that I remember is in terms of a date we said May 5th, Cinco de Mayo for whatever reason we would celebrate.

Jill: Yes this was absolutely a go.

Jerry Cobb: Now it was real. Now they had to make it happen. Now they had to get to work.

There was plenty to do. Not to mention the responsibilities they still had to their existing clients.

Nancy: You owe it to your clients to continue to do business as normal because you always want to give them your all. And you couldn't say anything, absolutely not.

Jerry Cobb: Months of checklists, months of paperwork, months of decisions on everything from setting up compliance to picking out office chairs.

But even though the path to independence had been blazed before and resources and infrastructure were there to support them, Dustin still felt anxious about the decision.

Dustin Bench: I think what I was more worried about was letting Jill and Nancy down because at that point I was thinking, "Oh my gosh, you know, I feel like I brought them down this road and what if it doesn't work?" And that was the first time I—my confidence wavered a little bit and I thought, "Oh man, I could be ruining everybody's lives."

Jerry Cobb: Doubt, fear, nerves… all of that manifested itself at one point or another throughout their transition. Eventually, the team has everything locked into place.

Dustin Bench: We were ready. The office is ready. I kept checking things. We had phone lists ready to call clients.

Jerry Cobb: All they really needed now was their license from the Securities and Exchange Commission. They did their paperwork. Then they waited. And waited.

Nancy: We did not know when the SEC would approve us. Every day we were checking, "Are we approved? Are we approved? No." Then every day Dustin would have to print out those resignation letters and we were carrying it with us.

Dustin Bench: And then I started losing sleep over of what if, what if our clients don't come?

What if they don't understand or care about our story? And that was all scary for me.

Jill: Constant level of stress and anxiety til we left, definitely. It really intensified because you're so close but at any minute you know it can all blow up in your face.

Jerry Cobb: Fortunately, they had each other's backs. 

Jill: It was such a great thing to have partners to lean on, to talk through the difficulties as we, as we came along.

Nancy: So if one of us was kind of down, the other two would pull us up. I mean we would not allow each other to fail.

Jerry Cobb: Finally, in mid-May, the SEC license came through. It was time to resign and launch their independent RIA firm.

Jill: We're all there at 6:30 in the morning.

Dustin Bench: Super nervousness like you're about to get on a roller coaster, and you're excited about it, but you're also afraid.

Jill: My stomach was just full of butterflies.

Dustin Bench: We wanted to be there waiting, so that we could resign as early as possible and get a start on our day.

Jill: And so you're wandering around the office, waiting for the first manager to come in and …

Dustin Bench: It was a long moment. As people are showing up to work, we're saying goodbye to everybody and telling them what we're doing, because our offices are cleaned out. They know. They know we're not going to be there.

Nancy: I remember it was the operations manager, and as soon as he saw us together, he knew.

Jill: That was a weird feeling, too, because for me, 30 years of working there, hand him a piece of paper.

Dustin Bench: The resignation letter that I think I'd printed twelve times, with different dates. 

Jill: And they go, "Okay, hand me your keys." Hand them their keys. "Okay, thank you. See you later."

Dustin Bench: And he said, "I'm really sorry to see you guys go." And gave hugs and that was it.

Jill: Our feeling was just ecstatic. Walked out the door. We walked down to our new location.

Dustin Bench: I'm walking really fast, 'cause I want to get there and open up the office so we can get started.

Nancy: You just wanted to begin your new life so to speak as an independent.

Jill: Walked in that door. Then it was kind of a feeling of wow, here we are.

Dustin Bench: Then it was immediate realization, "This is what we did. Now it's time to work."

Jerry Cobb: Dustin, Jill, and Nancy opened the doors to Altus Wealth Group, their independently owned RIA, on May 19, 2017. I'm sure you're wondering how's business, right? We'll find out, when we check in with Dustin a little later in the show. But first, let's see what we can learn from how this team managed their transition together.

Nikolee Turner: I think it's powerful that Dustin, Joe and Nancy saw themselves as a really strong unit. 

Jerry Cobb: Nikolee Turner is a managing director of business consulting at Charles Schwab.

She helps independent advisors optimize their businesses for growth and take advantage of opportunities or overcome challenges.

Nikolee Turner: The reason why they felt like such a strong unit was because they shared a common purpose and that's really important for RIA's is to know their why or to have a purpose. And that bands people together even if they have different ideas about how the business should be run or what it's eventual future will look like.

Jerry Cobb: And it's not only a shared purpose or vision that makes a strong team.

Nikolee Turner: So, a high performing team is one, in my opinion, that first of all, they have that component of trust but they also then recognize that each of them brings something different to the table. They have a diversity of talent and when you can leverage all the different talents and skills. A true team works interdependently and when they can leverage each other's strengths and talents and emotional support, then they can create that synergy which is being able to get something greater from working together than they could from the sum of each of their efforts and when that comes together and they create that synergy, that's what creates these amazing, thriving RIAs. Also, obviously, great communication, being able to talk to one another, being able to make things really explicit. That goes into that vision again. It's really about the clear picture, not necessarily how grandiose the vision is.

Jerry Cobb: And Dustin's story is typical, in that at the end of the day his team felt a great sense of satisfaction about their choice.

Nikolee Turner: I think that going independent is such a success story because of what happens to the folks after they've gone independent. So that sense of building their own business, building their own firm, that pride in ownership is very common and really the freedom, it's often times the freedom to do what's best for clients, the freedom to be able to serve clients in the way that they have wanted to or the way that they feel is best suited to their interests. They grow fast, they retain a high percentage of the clients that they were serving before. So the independent story is really a success story.

Jerry Cobb: Nikolee Turner is a managing director of business consulting at Charles Schwab.

Jerry Cobb: If there's one looming anxiety that hangs over the heads of every advisor considering independence, it's questions about clients. Will they understand my decision? Will they follow me? It's been two years since Altus Wealth Group opened its doors. And I wanted to know how they tried to answer those questions for themselves.

Dustin Bench: I ran numbers as low as 25% of our clients moving. Almost like nobody was ever going to follow us. I thought, "Okay, that's as good as it's going to get."  But when I started talking to clients, it felt like every single call, everyone was excited, It was, "How do I move and how does this work?" That was super surprising to me.

Jerry Cobb: Sounds like you were able to retain the majority, if not all of your clients. Is that right?

Dustin Bench:  Yeah. I run those numbers a lot, and I think it was close to 95%.

Jerry Cobb: What was the size of your business when you were at the wirehouse and what is the size today, as measured by either clients or assets under management or both?

Dustin Bench:  So our assets under management today are higher than they were before. We manage right around 225 million and our client number is lower. There were so many clients that we had to service at our former firm, that we really didn't have a choice in whether we serviced them or not. Now we do and so now we can provide better service to those clients and we're growing.

Jerry Cobb: What would you have done differently? What didn't pan out the way you had expected?

Dustin Bench:  You know, there was a couple of different things that we relied on. One of them was our phones. So I hired this VOIP company, voice over IP company to get us phone numbers, and we find out the first day we're in here that although it was our same area code, it was a local number 200 miles south of us. And so when local clients were calling from their home phone, they had to call a long distance number. It was a big deal. We do so much business over the phone that I thought we have just destroyed our business.  But it wasn't a big deal at all when we ended up having to change those numbers and I don't think anyone even remembers what those numbers were.

Dustin Bench:  The other part was we hired a HR company to do payroll for us and they didn't really understand our business. I think it was a call we did just on price, so they're the cheapest one, it's just payroll for a few of us, we can let them do it. We ended up changing them out within a couple months.

Jerry Cobb: What about for you and your teammates there on a personal level, how has this transition impacted your personal lives?

Dustin Bench:  Nancy just had her second grandchild. She spent a month and a half almost away from the office, still working remotely, which was impossible before. Jill spends her summers in Michigan, still working and her winters in Colorado. For me, I look at mostly my kids. I have two young children, they both want to be entrepreneurs and that's something that they saw firsthand and it has really changed their outlook on life.

Jerry Cobb: So summing up, what would be the advice you'd give someone else who might be in the shoes that you were in a couple years back considering a possible move to the independent model?

Dustin Bench:  I would say if you're considering it at all, do yourself and favor and go talk to somebody who's already done it. Spend a few hours with them, and go through all those aspects because it's likely the fears or the concerns that you have, are not really founded. I believe that any advisor that has a good practice, where they're trying to do the right thing for their clients, they're trying to build wealth for their own families and themselves, that there's not a better path than this independent RIA model.

Jerry Cobb: Dustin Bench is one of three founding members of Altus Wealth Group. They're in Colorado Springs, Colorado.

Today's story focused on the power of teamwork, and if you're contemplating a similar move, here are a few things to keep in mind: Anxiety is a natural part of change. You need a vision. And it only takes one person to keep that vision alive for the others. And remember, a strong team is built on trust. And it's that profound trust that gives a team the confidence to take the leap to independence. And when I hear Dustin's story, here's what inspires me most: First, nearly all of their clients at the wirehouse followed them to independence. And that actually aligns with Schwab's own studies. On average, Independent RIAs retain 87% of their clients. Second, Dustin and his team's transition to independence allowed them to build stronger client relationships and have more flexibility in their schedules, all while running a thriving firm that is still growing. And finally, they found the freedom they were looking for, to work the way they wanted to, and live the life they've been dreaming about.

And they're not alone. Thousands of financial advisors across the country take the leap and become independent RIAs. Each story, and each transition, is unique. But the steps they take, and the support they need, is often the same.

Learn more, lots more, about the RIA model and how Schwab Advisor Services can help you forge your own path to independence.

Find us online, at Schwab.com/RIA, or look for the link in the show description to this episode.

I'm Jerry Cobb and this is How I Became an Independent RIA, an original podcast from Schwab Advisor Services.

Speaker 4: Schwab Advisor Services serves independent investment advisors and includes the custody, trading and support services of Schwab.

The comments, views, and opinions expressed in the podcast are those of the speakers and do not necessarily represent the views of Schwab.

They are provided for informational purposes only.

Experiences expressed by advisors may not be representative of the experience of other advisors and are not a guarantee of future success.

The above mentioned firms and their employees are not affiliated with or employees of Schwab unless otherwise noted.

They should not be construed as a recommendation, endorsement of, or sponsorship by Schwab.

Data contained herein from third-party providers is obtained from what are considered reliable sources.

However, its accuracy, completeness or reliability cannot be guaranteed. Copyright 2019 Charles Schwab & Co., Inc. All rights reserved. Member SIPC.

Independent investment advisors are not owned by, affiliated with or supervised by Schwab.

COMPLIANCE CODE: (1219-96S1)  
 

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After you listen

Many financial advisors find solutions to their work frustrations when they go independent. Not knowing the opportunities is often the only thing holding them back.

Stronger Together: Join an existing RIA firm >

Joe Zappia wasn't sure he wanted to strike out on his own. So he didn't. He joined an existing independent RIA firm instead, and he's never looked back.

Learn what investment advisors can gain professionally by partnering with others who have already cleared a path to independence. 

Listen below or on your favorite podcast player: Apple Podcasts, Google Podcasts, Spotify or copy to your RSS reader. If you're new to podcasts, check out our tips for listening to podcasts

podcast 2

Read the transcript

Joe Zappia: It was slowly then suddenly. There were many actions along the way that I viewed as annoyances, sort of like mosquitoes or flies buzzing around your head. But, suddenly a handful of things started to happen within the organization… I no longer felt that I could do what was best for the client without a lot of distractions or friction or conflict.
 
Jerry Cobb: For over 26 years, Joe Zappia was an advisor at an investment firm in New York, and he never dreamed of working anywhere else.
 
Joe Zappia: I was always really super happy with the way I was treated by this firm, and I thought I would spend my whole career there.
 
Jerry Cobb: But after that firm merged with a larger investment bank, things started to change, and Joe began to evaluate his career options.
 
He realized he wanted to go independent, but he wasn't sure if he had the desire to start his own business from the ground up.
 
Eventually Joe joined an existing independent RIA firm, which he found personally and professionally enriching.
 
Welcome back to your insider's guide to becoming an independent Registered Investment Advisor, or RIA.
 
I'm Jerry Cobb, Senior Business Consultant at Charles Schwab, and this is How I Became an Independent RIA, an original podcast from Schwab Advisor Services.™
 
Speaker 1: You get to the point where you're like, "You know what, the risk I can take to leave and be independent is absolutely worth it."
 
Speaker 2: I felt apprehensiveness, nervousness, but yet excitement.
 
Speaker 3: You know that you can see the light at the end of the tunnel.
 
Speaker 1: Really everything we wanted was possible.
 
Speaker 2: Even when it's hard or more than you thought, you still got to do it.
 
Speaker 2: Everything that stopped me from taking that next step was just fear and that fear was in the way of me actually being fulfilled.
 
Speaker 1: Complete freedom and happiness has been the result.
 
Jerry Cobb: Not all advisors who choose to go independent have an interest in starting their own business.
 
Some find that joining an existing independent RIA firm can offer them the flexibility that they want in order to best serve their clients.
 
In today's episode, we'll explore what an alternative path to independence looks like: when an advisor chooses to join an independent RIA firm as opposed to starting one themselves.
 
We'll look at what's to be gained professionally by such a move.
 
And then we'll check with an expert about what advisors should look for when choosing an independent RIA firm and how this kind of match-making works.
 
And as always, we'll get a little practical advice, and bust a few myths about the RIA journey.
 
So you can learn from others as you consider your own path forward.
 
But let's start with Joe and what motivated him to think about leaving a job that he had loved for 26 years.
 
Jerry Cobb: Joe began his career in finance straight out of college in the 1980s.
 
He joined an investment firm in New York, and over the course of 26 years built a team of advisors who he worked with to manage other branches of the firm around the state.
 
Joe Zappia: During that time I had great success with this firm. This firm was run by family. No proprietary product, no incentives to sell certain vehicles one over the other. But really always putting the client first.
 
Jerry Cobb: But then, the firm was sold to a very large investment bank. For the first time in the company's history, it was no longer led by family members, and things started to change.
 
Joe Zappia: Over the course of several years, we had gone from being a firm that really put the client first to all of a sudden being a firm that was run like big bank. And so the culture immediately changed, the incentives changed.
 
Jerry Cobb: At first Joe thought that he could work around some of these changes.
 
Joe Zappia: We were able to do the blocking and tackling, and sort of protect our clients from the bank, and some of their initiatives. But for the first time in my career, it was like, you had little crickets chirping in your ear about, "Maybe you should talk to a client about a secured line of credit, or maybe you should begin talking to them about opening up banking accounts... As things progressed it began to become a little bit more obvious that in fact there were incentives being created for us to use more bank products. And it may or may not have always been in the client's best interest.
 
Jerry Cobb: Joe grew uncomfortable.
 
He started to examine his own thought process to ensure that he wasn't letting the firm influence the way he was advising clients or structuring financial portfolios.
 
Joe Zappia: You're an employee of a firm that's doing something that clearly benefits them and not the client, and you're somewhat conflicted because you're an employee of this firm, but at the same time, you're really hired by the client, so you know, you have that difficult conversation.
 
Jerry Cobb: More and more changes started to take place at the firm.
 
Then something happened that made Joe realize that he had to think long and hard about whose interests he really wanted to serve.
 
Joe Zappia: One day I was in, and I'll never forget this, I was in our break room and I had made myself a cup of coffee and there was a big banner on the wall, there was a golf tournament in fact, one of the major golf tournaments coming to our city, there was a big poster board on the wall that talked about whoever leads the complex in lending you'll receive four passes to invite clients to the event. So I read that and I was a little bit annoyed.
 
So I called my local manager and I said, "Explain to me what you're doing here with this contest as it relates to this golf tournament. Because in my mind I just want to pick or contact our best clients, our most loyal clients, and I just want to say thank you and invite them to the golf tournament. And I don't think it makes sense that I need to sell a certain number of loans or lines of credit or mortgages in order to get these tickets. I think you should be giving me tickets because I'm one of the larger producers and I want to invite clients."
 
And the manager basically said, "Sorry this is the program and if you like the tickets, you need to sell some lending products." So I promptly said, "That's fine. I'll buy my own tickets and I'll take my own clients." So that was one of the instances where I said to myself, what the heck is going on here? You know, clearly, their compensation is tied heavily to how many bank products we use, or else they wouldn't be putting up incentives like this. And again, misaligned incentives create bad behavior. We've seen it in financial services for decades and decades.
 
Jerry Cobb: After that incident, Joe started to do research to try and find a firm that was similar to the one where he'd worked before the merger.
 
A firm where the client came first, the advisor second, and everyone else was in place to help the advisor help the client.
 
He knew he didn't want to reinvent the wheel.
 
He needed to meet with someone who'd done it all before and who could advise him.
 
That's when he started talking to Lori.
 
Lori Van Dusen: I'm Lori van Dusen, founder and CEO of LVW Advisors.
 
Jerry Cobb: Lori is an example of an advisor who knew she needed to go independent by building her own firm.
 
Not only did she have experience starting organizations from the ground up, Lori was committed to a strong set of values that she wanted to implement in her own business.
 
Lori Van Dusen: I'm the strategist, but I like to put pieces together so that we can really solve the whole problem.
 
I fought a lot of kind of battles in the wirehouse bank brokerage industry around objectivity and was kind of known for starting organizations around educating advisors on best practices. And giving public talks around the country.
 
Jerry Cobb: Lori and Joe ran in the same professional circles. And although they'd seen each other at various awards conferences, research functions, and social events, they never really talked business, until now.
 
Joe Zappia: I knew that she had gone independent. I reached out to her and I said that I'd like to sit down and talk with her about why she did it, how she did it, what she would do differently if she were to do it today, and I was basically picking her brain as a way for me to figure out the best way for me to take my team independent and create a better place for my clients.
 
Lori Van Dusen: And I said to him, "Listen, I've been through a long journey to put this firm together and I never, ever want you to think that you didn't know what you needed to know to make the best decision. So, I'm going to be completely transparent with you."
 
Jerry Cobb: Over the next year, Joe and Lori met regularly as Joe thought about his professional future.
 
And then something happened that changed things for both of them.
 
Lori Van Dusen: We realized that my skill set, my strategic skill set, my business development skill set, and my investment experience, and his different complementary investment experience, his compliance skills, his operational background at a super high level, were very, very synergistic.
 
Joe Zappia: We said…Why don't we do this together? Why don't you come on and be my partner?
 
Lori Van Dusen: "Let's just combine this, you join me."
 
Joe Zappia: We can create some great synergies and create a firm that maybe we can really make a difference for all of our clients and grow from there.
 
Jerry Cobb: On top of having a complementary skill set, Lori and Joe both felt they shared values that would be essential to running a business together.
 
They both went independent for the same reasons.
 
Lori Van Dusen: From day one I really didn't understand the industry in terms of how they approached the client. There was a lot of selling of products and upside down investments and silos… And, at a certain stage I just said, "I need to take this to the next level." And, I know it's independence because I know in an independent platform I can bring together the things that I really need to serve the client well, but to solve the whole problem. And, I think he was at the same place.
 
Jerry Cobb: Joe now knew exactly what he wanted to do. He'd partner with Lori and bring his five-person team to work with her at her firm, LVW Advisors.
 
Joe Zappia: I have little doubt that we could have started our own firm and been successful, but I thought there were huge benefits and synergies that could be created by partnering with somebody that really was as successful as Lori had been really for two and a half decades. But also the impressive team that she had put around her.
 
Jerry Cobb: The decision came naturally to Joe. He didn't lose any sleep over it. It felt like the right move.
 
Joe Zappia: So when I made the decision to go independent, I really didn't have much in the way of concern. For me the decision was so obvious I knew I wasn't making the decision because somebody was offering to pay me a large check. I knew I wasn't making the decision because I was running from something. I made the decision purely because I was absolutely convinced it was what was best for the client. So as a result, I really didn't have any fear because I was so certain and so convicted in what we were doing that I had no doubt about how successful I would be transitioning.
 
Jerry Cobb: LVW Advisors already had a research department, reporting and compliance, and all the infrastructure typical of an independent RIA firm.
 
But the office had to be renovated to make room for Joe's team. And Joe needed to decide on a custodian to work with, a reporting system, and any software that needed to be enhanced within LVW.
 
It took Joe and his team a little over four months to complete the necessary paperwork to make the transition happen. Joe felt so at peace with his decision that when resignation day rolled around, he saw it as unremarkable.
 
Joe Zappia: So the day, the actual day, May 9th of 2014, when we actually all resigned, it was a very, very uneventful day. And I walked into my then manager's office at 8:00 AM on a Thursday morning and handed him five resignation letters, mine included, and shook his hand, and walked out the door.
 
Jerry Cobb: The team was shortly at work at Lori's firm, putting together packages to send out to clients and making phone calls.
 
Joe Zappia: It was really a pretty incredibly powerful feeling to tell clients your story, tell them what just happened, why you did what you did, and why it's better for them, and then to have them reaffirm their trust in us, was you know, was really powerful.
 
Jerry Cobb: Joe found himself surprised at some of his client's reactions.
 
Joe Zappia: Several clients actually said, "Surprised it took you this long," or, "I never really liked that bank anyway," or, "Was wondering how long you were going to put up with it," and we actually, again, felt pretty good about that. That was one of the surprises, and with that came referrals.
 
Jerry Cobb: Within 60 days of his transition, Joe had retained 93 percent of his clients.
 
And once again, he was part of a workplace culture he was proud of.
 
Joe Zappia: The culture of this firm is: The client is always first, and do what's best for the client, and if we don't have the resources in-house, then find partners outside that we can bring in to help provide the solution for the client.
 
Lori Van Dusen: Being independent is so fantastic because you can build these pieces on that the client needs and solve the whole problem. And, let's always kind of skate to where the puck is going. I don't want to be in a position where, you know, four years from now I'm looking back and saying, "Wow, we should have built that" or "We should have been doing this," or "We should have been thinking that client's needs would evolve to this." And, I think that's what makes us really unique.
 
Lenny Chang: The nature of the independent movement is all about doing what is in the best interest of the client. And certainly the story of Joe and Lori coming together started with that notion. So there needs to be a real strategic rationale.
 
Jerry Cobb: Lenny Chang is Co-Founder of Focus Financial Partners, which helps independent firms problem solve and strengthen their businesses.
 
Lenny Chang: It's about what is in the best interest of the client and joining forces with someone, it is how am I going to work well? Am I going to work well with this person? Cultural compatibility is absolutely the number one criteria in determining whether or not coming together with someone else is actually going to be better for my client. And clearly Joe and Lori spent a lot of time thinking through the fit.
 
Jerry Cobb: But figuring out whether there's true cultural compatibility and real alignment around company culture, can be tough.
 
Lenny Chang: There's no shortcut to this. There's no silver bullet…. I likened it to the airport test, right? Could you spend 24 hours with this person stuck in an airport? And really getting at that. That's critical and there's no antidote to spending a lot of time before pulling the trigger on some type of combination.
 
Jerry Cobb: Joe and Lori had many discussions about not just their similarities, but also their differences. And Lenny says understanding how your potential partner is different from you can be a critical component of forging a successful partnership.
 
Lenny Chang: For example, maybe one part of the party is very strong on alternative investments and not really a core expertise for the other right party. But the other party has a lot of tax or estate planning expertise, which may be not the strength of the other firm. Right? That would be a pretty powerful combination and a reason to celebrate the differences.
 
Jerry Cobb: But other differences should be deal breakers.
 
Lenny Chang: If there are key fundamental differences in outlook to life, to business philosophy, life's short. Probably not such a great idea to kind of carry on in those conversations.
 
Jerry Cobb: For an advisor like Joe who was looking for a better way to manage his clients, there are so many more options available today than in the past. Independent advisors may choose to outsource some functions, like compliance or operations, whereas others embrace all aspects of running a business.
 
Lenny Chang: There are a lot of folks who are now a lot more aware of their choices, right? It's changed dramatically over the 10, 20 years.
 
Jerry Cobb: Technology is a great example. Lenny says the technology and infrastructure available to an independent is different from what's available inside a wirehouse.
 
Lenny Chang: In a wirehouse environment, to move that ship and really make any sweeping changes, it's a Herculean effort, right, and multiple, multiple years. Whereas the nimbleness of the independent space is such that there's so many choices and the technology is there now to support that.
Jerry Cobb: Lenny Chang is Co-Founder of Focus Financial Partners, in San Francisco, California.
It's been years since Joe joined LVW Advisors, and I wanted to check in to ask about how things were going.
 
Jerry Cobb: Well, first question, Joe... What would you say the advantages to an advisor are of joining an independent RIA firm like you did?
 
Joe Zappia: Well, I think that any great advisor ... And what I mean by that is an advisor that knows how to put the clients first, has some level of empathy, et cetera, can do a good job for their clients pretty much at any firm. It's just a question of how much friction they want to deal with on a day-to-day basis to deliver that to their clients.
 
I had made the decision that I had had enough friction and that I wanted to really go out on my own and create a firm that we could put the client in the center and then build all the products and services around that client. And I think that's really the big ... that's really one of the biggest advantages to being independent. If you have a vision of what you want your service model to look like, what you want your technology to look like, or how you present yourself to the client, what sort of products and services and solutions you want to offer them, then going independent is a great thing.
 
Jerry Cobb: Can you talk a little bit about how the matchmaking process worked that ultimately led you to join LVW? What were you looking for first in an independent firm?
 
Joe Zappia: So, I didn't really know what I was looking for when I first made the decision that I needed to make a change. In fact, I talked with other brokerage firms, private banks, I spoke with a couple of aggregators like Focus Financial, et cetera, just to just understand better what the independent space looked like. And along the way, I thought that we should make a move to a place that had a process, had infrastructure, had significant resources around research, and diligence around ... building portfolios, structured investment committee, etc. And so when I made the decision that I wanted to go independent with a firm that had some of those attributes, it was pretty easy for me to start narrowing down the choices.
 
Jerry Cobb: What about considerations like ... governance and equity ownership? Were those important criteria for you?
 
Joe Zappia: Yeah, absolutely. So right from the very beginning when Lori Van Dusen, my partner here at LVW, and I moved our dialogue from just simply due diligence and fact finding, on my part, to, "Hey, maybe we should become partners and build something better than we both have right now," the consideration right from that point forward was that I would be a decision maker, I would be an owner, and I would be in control with my partner. But in control of how we structured the firm, the vision for the firm, hiring, in the ways in which we would advance and elevate our culture and client experience.
 
Jerry Cobb: Interesting. And what about legacy? Was that important to you? And by that I mean, typically we think of the wirehouse scenario as an advisor reaches a certain peak and slows down and eventually leaves the firm with some kind of package. Whereas, in the independent space you really have this opportunity to build and leave a legacy. Was any of that important in your decision making?
 
Joe Zappia: Yeah, absolutely. That's a great question, and it was a big part of our decision-making. You know, over the 20 plus year career that I had developed a pretty significant book of business, and it's changed now at the wirehouse firms, but at the time, there really wasn't much in the way of legacy planning or any real value that could pass on to family members, my wife, et cetera. And at the same time, there was no way to really capture the true value of the business that you had built as you transitioned from, as you said, doing what I do today to eventually transitioning and recirculating some of that cash flow to the next generation.
 
So that was a big part of my decision to go independent because I knew that it would help protect my family ... and also protect our clients because I could focus and invest resources, and building the right team around me for the appropriate succession plan.
 
Jerry Cobb: So knowing what you know now, and after having made the journey to independence, what kind of advice would you give to someone looking to join an independent firm?
 
Joe Zappia: The advice that I would give is, do lots of research, do lots of due diligence, don't be sold by the sizzle, and don't do it purely for cash flow. I think that going independent is, at times, it's a tall hill to climb. There's lots of work, lots of effort involved. I think the rewards are great.
 
Now, one of the things that's changed… is there's plenty of ways to go independent and join independent firms but come in to larger organizations that have already created so much of the process and the structure that you need to be successful. So it's really kind of an exciting time now for advisors to go independent because it's much easier for someone to come and plug in.
 
Joe Zappia is a Principal and Co-chief Investment Officer at LVW Advisors, in Pittsford, New York.
 
Today's story focused on exploring an alternative path to independence: joining a pre-existing independent RIA firm, as opposed to starting your own.
 
If you're thinking of going independent and don't know if you want to start your own firm or join one, here's a few things to think about:
 
Starting your own firm requires a desire to not only work with clients but also to run a business. For those who are comfortable embracing a little risk and taking on a start-up, it may offer you a little more control over the business as a whole than joining another firm would.
 
Joining a pre-existing independent RIA firm will allow you to focus more on working directly with clients. In addition, you'll get the kind of flexible infrastructure typical of an independent RIA firm, which will allow you the freedom to serve clients in a way that's best for them.
 
If you're contemplating joining an existing RIA firm, this is what you should keep in mind to make sure it's a good fit:
 
First make sure the firm shares your values when it comes to client services, and that you're not replicating the kind of environment that you're leaving.
 
Look for a firm which has employees that have complementary skill sets, so you can confirm that what you're offering will add value to the firm, and that you're joining a workforce that will help you grow professionally.
 
And finally, going independent doesn't mean going it alone.
 
Many have blazed the trail before you, and you can benefit not only from others' expertise, but also from the added infrastructure that's available to support independent firms.
 
As you know, thousands of financial advisors across the country take the leap and become independent RIAs.
 
Each story, and each transition, is unique. But the steps they take, and the support they need, is often the same.
 
Learn more—lots more—about the RIA model, and how Schwab Advisor Services can help you forge your own path to independence.
 
Find us online, at Schwab.com/RIA, or look for the link in the show description to this episode.
 
I'm Jerry Cobb, and this is How I Became an Independent RIA, an original podcast from Schwab Advisor Services.
 
Speaker 4: Schwab Advisor Services serves independent investment advisors and includes the custody, trading, and support services of Schwab.
 
The comments, views, and opinions expressed in the podcast are those of the speakers and do not necessarily represent the views of Schwab.
 
They are provided for informational purposes only.
 
Experiences expressed by advisors may not be representative of the experience of other advisors and are not a guarantee of future success.
 
The above-mentioned firms and their employees are not affiliated with or employees of Schwab unless otherwise noted.
 
They should not be construed as a recommendation, endorsement of, or sponsorship by Schwab.
 
Data contained herein from third-party providers is obtained from what are considered reliable sources.
 
However, its accuracy, completeness, or reliability cannot be guaranteed. Copyright 2019 Charles Schwab & Co., Inc. All rights reserved. Member SIPC.
 
Independent investment advisors are not owned by, affiliated with, or supervised by Schwab.
 
Compliance Code: (1219-96S1) (0520-0WHK)
 

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After you listen

Joe's story isn't unique. The growth of the RIA industry has led to many existing firms hiring more investment advisors, opening new offices, and building an ecosystem of support to help make it all happen.

No Matter What: Serving your clients >

When the 2017 California wildfires threw their clients' lives into disarray, Jim Aljian and Jessica Markarian were there for them—in ways the pair could not have been before going independent.

Learn how operating an independent RIA firm gives investment advisors the flexibility to serve their clients the way they see fit, especially during times of crisis.

Listen below or on your favorite podcast player: Apple Podcasts, Google Podcasts, Spotify or copy to your RSS reader. If you're new to podcasts, check out our tips for listening to podcasts

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Read the transcript

Jim Aljian: Driving through the area, it looked like war zone. I mean every single home, one after the other was just leveled to the foundation. Just black trees everywhere and just debris, and it was just horrendous. So, we were just able to run our business through our laptop computers at the hotel room. We were operating pretty efficiently throughout the entire ordeal.

Jerry Cobb: On October 8th, 2017, wildfires swept across northern California, destroying over 8,000 buildings and killing 44 people. 

Four years earlier, Jim Aljian and his long-time assistant, Jessica Markarian, had opened the doors to their independent investment firm, Aljian Capital Management, in Santa Rosa. 

Although their business was one of the few buildings in town spared by the fire, it sustained smoke damage and was closed for over a month for repairs. 

During this time, Jim and Jessica kept the firm up and running remotely, and their client focus broadened to help those who were struggling in the aftermath of the devastating disaster. 

Jim Aljian: The clients, they were very overwhelmed with the process… You know, we all compared notes as to where have you got with this part of your insurance. And has the insurance company, are they returning your calls? And are they answering your emails? And what is your adjuster saying?"

Jerry Cobb: Out of the ashes of the wildfires, Jim and Jessica found a way to strengthen their relationships with their clients, helping them rebuild their lives. 

Jim Aljian: I don't even consider these people to be clients any longer, they're really friends. 

Welcome back to your insider's guide to becoming an independent Registered Investment Advisor, or RIA. 

I'm Jerry Cobb, Senior Business Consultant at Charles Schwab, and this is How I Became an Independent RIA, an original podcast from Schwab Advisor Services.™

Speaker 1: You get to the point where you're like, "You know what, the risk I can take to leave and be independent is absolutely worth it."

Speaker 2: I felt apprehensiveness, nervousness, but yet excitement. 

Speaker 3: You know that you can see the light at the end of the tunnel. 

Speaker 1: Really everything we wanted was possible. 

Speaker 2: Even when it's hard or more than you thought, you still got to do it. 

Speaker 2: Everything that stopped me from taking that next step was just fear and that fear was in the way of me actually being fulfilled. 

Speaker 1: Complete freedom and happiness has been the result.

Jerry Cobb:  Advisors of all kinds have taken the path to independence and found success. 

In today's episode we explore the story of Aljian Capital Management, which was founded in 2013. It's a story about how operating as an independent RIA firm allows you more flexibility to serve your clients, especially during a time of crisis. 

First, we'll hear Aljian Capital Management's origin story, how the firm survived the wildfires of 2017 and helped clients who lost everything and had to start over. Then, we'll check in with an expert on the importance of client relationships, how clients' expectations are changing, and why investors may prefer independent firms. And as always, we'll get a little practical advice, and bust a few myths about the RIA journey. So you can learn from others as you consider your own path forward.

Jerry Cobb: Jim Aljian sold stocks for a large investment bank for 26 years. And even though things were not perfect, Jim was content.

Jim Aljian: You know, I just liked the culture, I liked the firm. I had a lot of friends. 

Jerry Cobb: For 10 years at the firm, Jim worked with Jessica Markarian, who had previously been an operations manager at another investment bank, and now worked as an assistant to Jim and another broker. 

But Jessica was having second thoughts about her position at the firm. She found the bureaucracy exhausting. 

Jessica Markarian: Sometimes a piece of mail would take two to three days before it would filter down to the assistant's desk, or a phone message that was taken. Instead of the client going through to your voicemail, sometimes would take days to land on our desk. 

I had one client say, "I actually walked into the office, dropped off a form, you don't have it?" And I had to go up to the front desk and say, "Was Mr. Smith here yesterday?" "Well, yeah." "Well, where's the form?" "Oh, I don't know." And it took a while for them to locate it, and then they said, "Well, yeah, we got it, but you can't have it yet because we have to review it." It just was silly.

Jerry Cobb: Meanwhile, Jim was starting to reconsider how much the firm was actually benefiting his clients.  

Jim Aljian: Every single year their firm wanted a larger slice of the advisors' revenue, and every year their firm kept coming up with more nuisance fees for the clients. And every year those fees kept getting more severe.

Jerry Cobb: Jim also felt restricted in the ways he could manage his clients' accounts.  

Jim Aljian: I wanted the flexibility to manage my accounts without somebody telling me all of the rules and guidelines. They had so many rules and restrictions on what I could and could not do managing my accounts for my clients.

Jerry Cobb: After the firm underwent a merger, Jim knew it was time for him to look at his options.  

Jim Aljian: The culture was a lot different; it wasn't as friendly. The camaraderie was gone. And I just felt like, you know what, it's time for me to evaluate my other alternatives. 

Jerry Cobb: Jessica felt the same. 

Jessica Markarian: It kind of got to the point where it was just very frustrating to come in every day, and it seemed like the simplest tasks became very difficult to complete. 

Jim Aljian: We wanted out of that culture. 

Jerry Cobb: The two of them spent a year evaluating their options. Jim interviewed at other large firms, but they didn't offer the flexibility and independence he was looking for. 

Then he found out about the RIA model. Intrigued by the possibilities of becoming an RIA, Jim and Jessica researched the mechanics of what a move to independence would look like. 

Jim Aljian: And then Jessica and I circled September the 6th on our calendar.

Jerry Cobb: It was January 2013. They had eight months till resignation day and a lot of work to do. Swirling through their minds were all the typical concerns common to advisors looking to go independent. 

Jim Aljian: Well yeah, that was the biggest concern, what are our clients going to think? Are they going to support us? Are they really loyal to me? I mean, I just didn't know.

Jessica Markarian: He had no idea that even his family would transfer. It was basically his own assets and my assets, and that was it. 

Jerry Cobb: After deciding on a custodian, vendors, renting an office space, and completing all the necessary paperwork, they were finally ready. 

Their last day arrived.  
 
Jim Aljian: That was a really, really nervous day, and...

Jessica Markarian: I probably was nervous all week long. I can still remember that feeling of being nauseous… But at the same time, it was exciting. 

Jerry Cobb: Aljian Capital Management opened its doors on September 6, 2013, in Santa Rosa, California. 

Jim retained the majority of his clients. He and Jessica worked nonstop for the first few months to get the business off the ground, and things were going well. For the next four years, Jim watched his business thrive and grow. Neither Jessica nor Jim felt any regrets about their decision, especially because it strengthened their relationships with clients. 

Jessica Markarian: In the years that I've done this, there are people that I work with that come to work, do their job, and they just leave, and it's just a job. And then there's people that make a career out of it, and I've always felt like this is my career. I have a lot of personal interest in our clients and their lives. They have interest in my life, and I feel very fortunate to be in the situation that I'm in. 

Jerry Cobb: But something was about to happen which would threaten their business, their homes, their clients—and even their families. It would be completely outside of their control, a disaster on a scale they never could have imagined.    

It was early on the morning of October 8th, 2017. 

Jessica Markarian: I woke up at ... 2:00 o'clock in the morning, maybe, hearing lots of hooting and yelling and cars, and honking, and went to my bedroom window and looked outside and I saw the transformers flickering and smelled smoke. I woke my husband up and said, "I think something's wrong." And realized what was happening. At that point, the fire could be seen over the hill beyond our house. We hadn't received any type of alerts or anything yet. But shortly after we got up and got our kids up, we started receiving Nixle alerts and a phone call alerting us to evacuate, so we collected our things and left our home.

Jerry Cobb: Wildfires were spreading across northern California at an alarming pace. Jim lived near Jessica, but at the time he was vacationing with his wife in Ireland. They were in the middle of a tour when Jim got a frantic call from his adult daughter. 

Jim Aljian: She was, she was hysterical. She had heard on the news report that the Sky Farm subdivision had been hit. So that's where we lived, so she told us that when she called us on the phone. 

Jerry Cobb: As Jim raced to the Dublin airport to catch the next flight back to California, Jessica and her family were heading to her sister-in-law's house in a nearby community.

Her phone buzzed. It was a text from Jim.  

Jessica Markarian: And he kept asking me if I knew anything, if I had heard anything, how his house was, how the office was… 

Jerry Cobb: Jim and his wife spent the night in a London hotel on a layover. They went online, frantically reading everything they could about the fire, desperate to find out if their house was still standing. 

Then it hit them. 

Jim Aljian: We spent a full evening just reading all of the news of what was happening. And we actually saw in a local newspaper, there was, you know, 15-20 fire photos, and one of the photos was our house on fire.

Jessica Markarian: And then and short time later I got a text from him and it was a picture of his home in flames. 

Jerry Cobb: Jim returned home to find his house had burned to the ground. The devastation was overwhelming. 

Jim Aljian: Driving through the area, it looked like war zone. Every single home, one after the other was just leveled to the foundation. 

Jerry Cobb: But Jim and Jessica soon learned that not everything had burned. 

Jim Aljian: Everything around us burned. But for whatever reason, this office building survived. 

Jerry Cobb: Luckily Jessica's home was also spared. 

During this chaotic time, Jessica and Jim felt a strong sense of duty to their clients and were determined to keep the business open. The office was still standing, but damage from the fire and smoke meant they couldn't go back right away. There was no bureaucracy standing in their way. 
They could work from anywhere. So that's exactly what they did. 

Jessica Markarian: I was able to log in and work remote every day. 

Jerry Cobb: Meanwhile, Jim and his wife stayed at a local hotel. 

Jim Aljian: So, we were just able to run our business through our laptop computers at the hotel room, with the phone's being forwarded. And from a business standpoint, we did not miss a single client call, we didn't miss any market trades or anything. We were still in business and operating pretty efficiently throughout the entire ordeal.

Jessica Markarian: All of our mail got rerouted to a local post office, and I was just available from home every day. 

Jim Aljian: We sent out an email, I think, to the entire client base to let them know what had happened and that they might not be able to communicate with us regularly like always, and that we didn't have an office to meet them at. My clients were very supportive of our need.

Jerry Cobb: And Jim and Jessica were very supportive of their clients, too.   

Jim Aljian: Most of my clients that lost homes, I think, I think Jessica and I counted like six clients that lost homes. And I would say four of those were retired elderly widows. But these 85-year-old women losing their home, and I tried to help them as much as I could.

Jessica Markarian: We had one client that lost her home, and she had decided very early on she was not going to rebuild. And she needed some funds and was having difficulty establishing a loan through her local bank, and we were able to get her the funds that she needed from her accounts.

Jim Aljian: We just figured out a way for her to pay cash and not have to deal with the mortgage. 

Jessica Markarian: I honestly think that she feels she wouldn't have been able to get into the home she's in now if we hadn't helped her.

Jerry Cobb: Jim also spent time with his clients sharing experiences around talking to adjustors, dealing with the complex paperwork related to losing a home. 

Jim Aljian: And we all shared stories about what our insurance company were telling us and versus what their insurance company was telling them. 

Jerry Cobb: Jim and Jessica were able to return to their office building during the first week of November. And when they did, their computers, fax machine, and office printer did one client a world of good. 

Jessica Markarian: We had a client that was receiving multiple emails every day from her insurance company with claim forms and information and she needed to correspond with them, and so she was coming up to the office, and we were printing out all those documents for her and helping her.

Jerry Cobb: If you ask Jim, he'll tell you that he did what any advisor in his position would do. 

His job was to support his clients. And if this meant counselling them on how to handle the loss of a family home, sharing insurance findings, or helping them liquidate assets to get a new mortgage, well, that was what he was going to do. 

And after the fire, he realized that when you're truly free to put your clients' interest first, that relationship changes in a fundamental way.

Jim Aljian: You know, I don't even consider these people to be clients any longer; they're really friends. I mean I just feel like I have 250 friends, and they're clients at the same time.

Jerry Cobb: In the midst of catastrophe, Aljian Capital Management was able to play a pivotal role in helping their clients recover and rebuild. The trust and accountability that Jim and Jessica established strengthened their client relationships and allowed their independent advisory firm to thrive even more. 

Jim Aljian: This has exceeded my expectations. I had no idea that our firm would be this successful, that we would be this happy, that we would be this content. And this has been by far the best thing that Jessica and I could have done. 

Nikolee Turner: I think Jim's story is an example of how advisors are able, when they're independent, they're able to understand the needs of their clients and be able to change their expertise to focus in on the things that are important to their clients.  

Jerry Cobb: Nikolee Turner is a managing director of business consulting at Charles Schwab. She helps independent advisors optimize their businesses for growth and take advantage of opportunities or overcome challenges.

Nikolee Turner: The wildfires is a great example of him saying, I'm invested in you as a client, so I'm going to roll up my sleeves and figure out  what this means and how that's going to affect your financial plan, and there's so much power in just having someone say, "I'm going to be here. I don't know what I can do to help you, but I'm going to try to help you." 

Jerry Cobb: Jim went above and beyond when it came to helping his clients. It wasn't just about managing their financial portfolios.  

Nikolee Turner: It was really touching for me to hear that about Jim's story and to just imagine how supported that client felt. I definitely think he felt empowered, but I also don't think he feels like it's a business. I feel like he probably imagines that he would do this for a friend, and these clients are truly his friends. And so yes, it's important for him to continue on, to keep his business up and running, but I think he did this because of the connection that he has with his clients, not because of a business reason.

Jerry Cobb: Jim sees his firm as more than just a business - and he's not alone. Many advisors who've gone independent feel the same way and choose to go independent for the same reason. 

Nikolee Turner: There are so many advisors that tell me that the reason that they chose to go independent was because they thought that they could service their clients better. And that was the impetus for them to take the risk, to take the leap. That's why they started their businesses. 

Jerry Cobb: In fact, not only are more advisors choosing to go independent, but more clients are seeking out the services of independent firms. 

Nikolee Turner: I definitely see that shift of more and more clients that want to work with independent advisors. And I think it is that idea that money permeates almost every aspect of their lives. So, they want someone who they can trust, who's going to be there, and who's going to take all of those things into consideration, and not just, you know, what is the return on their investment. 

The client expects that the advisor is going to look out for them and to help them make decisions that will set them up for success, that will help them accomplish their goals and their dreams and their financial plan.

Nikolee Turner is a managing director of business consulting at Charles Schwab.

Jerry Cobb: It's been years since Aljian Capital Management opened its doors and the California wildfires caused them to temporarily close. I wanted to check in with Jim to ask about how the business was doing before and after the devastating wildfires. 

Jerry Cobb: So, let's start with kind of your vision for going independent. How would you describe your vision for going independent, and do you think you've accomplished that vision?

Jim Aljian: Well, definitely I have accomplished the vision that I had... I felt like for years, I was paying and giving away such a large slice of my revenue for such a small amount of support and service, and then they were always coming up with new fees for the client. They kept instituting account minimums. They made it very difficult for me to service or have small accounts… And I didn't like that, so my vision was to eliminate all of those forced requirements on me that I really didn't appreciate or like.

Jerry Cobb: So, in terms of advantages of being independent, are there advantages that you would point to, maybe advantages that you didn't expect or anticipate?

Jim Aljian: Yeah, there's so many advantages. I mean, I could probably talk for a half an hour to an hour just on the advantages, but the trading platform is so much more comprehensive. You know, at the wirehouse they have restrictions on what percentage you can have of a single particular stock. So, for instance, I have a large position in Google and Amazon, and the price of those shares would appreciate, and if the price of the stock appreciated and became more than 20% of the portfolio, I was literally forced to sell shares. The client didn't want the shares sold. The client would get the confirm, and they would say, "Why are you selling my Google? I don't want to sell any Google." And then you'd have to explain to them that, well, now it's 22% of the portfolio, and that's outside of the box, and I can't do that... They just had so many different layers of supervision that restricted what you could and could not do. And now... no one is putting those kinds of rules on me. So, that's a huge advantage. 

Jerry Cobb: You know, going independent and making the transition that you did is a huge event. In your case, though, you had this added event of the wildfires. You know, a lot of people would certainly understand if a business were impacted by a big natural disaster like the wildfires. If that business owner were to say, "You know what, I'm just stepping back or temporarily shutting down my business," but you decided not to do that.

Jim Aljian: Well, these clients that trust me with their money, and I just take that so seriously, and I just will do anything for any of these clients that place their trust with me. And we have just a very mutual respect, friendship, and they trust me, I trust them. We just get along beautifully.

Jerry Cobb: You've shared some really great examples of how the transition has affected you from a business perspective and how you run your business. What about from your clients' perspective? Do you find that you have more time, more capacity to interact and deal with clients?

Jim Aljian: Absolutely. At the wirehouse, you were pretty much limited to… their email platform and their telephone. You weren't permitted to email a client with your personal email, but there's probably 20, 25 clients now that have my personal cell phone, and we'll exchange a text on the weekend. They'll text me with a question about something, and I'll text them back with an answer. But I enjoy that extra layer of communications, outside of the normal business hours.

Jerry Cobb: Well, based on what you know now, what advice would you have for someone looking to go independent?

Jim Aljian: I would start preparing your book for a move, and you've got to make sure that your assets are portable. You've got to make sure that your clients have the trust and confidence in you, and so I wouldn't rush into it. I would have a very detailed business plan. We took like, "What's our worst-case scenario on the number of assets that we would transfer, and what do we think the average fee is going to be?" And we estimated some of my business costs, my rent, my lease, Jessica's salary. And so we did a pro forma, kind of on a low-end projection of what I would expect to make. And I said, "Okay, that will work." But you know, I really wish I would have done it 10 years sooner, and I could have done it 10 years sooner. 

Jerry Cobb: Jim Aljian is the owner of Aljian Capital Management in Santa Rosa, California. 

Today's story focused on client relationships and how operating as an independent advisor allows you the flexibility to meet the needs of your clients, in whatever way is most valuable to them. That strengthens the client-advisor relationship and your business. 

If you're thinking of becoming an RIA in order to serve clients better, here's a few things to keep in mind. 

Most advisors who go independent are glad they did. More than 90% of respondents to a survey by Schwab Advisor Services report they have no regrets about their decision to go independent. Another Schwab study shows 94% of advisors make the move to gain the flexibility to do what's best for their clients.
More and more clients are looking to employ the services of RIAs. According to a Cerulli study, the market share of managed assets has declined 10% for wirehouses over a 10-year period, while independent models have increased nearly 6% over the same period.
Advisors who go independent are more likely to see their relationships with clients deepen, because of how they're able to serve their unique needs.
And when I hear Jim's story, here's what inspires me most:

Even after losing his own home to the wildfires and being unable to work from his smoke-damaged office, Jim's singular focus on serving his clients never wavered. As a result, he strengthened his relationships with clients at a time when they needed him most.
Jim didn't hesitate to spend his time providing emotional and administrative support to help his clients who lost their homes in the wildfires. His view of client services expanded beyond managing their financial portfolios.
And ultimately, Jim's clients have now become his friends, which is more and more common to see among independent advisors.  
Thousands of financial advisors across the country take the leap and become independent RIAs. Each story, and each transition, is unique. But the steps they take, and the support they need, is often the same. 

Learn more—lots more—about the RIA model, and how Schwab Advisor Services can help you forge your own path to independence. 

Find us online, at Schwab.com/RIA, or look for the link in the show description to this episode. 

I'm Jerry Cobb, and this is How I Became an Independent RIA, an original podcast from Schwab Advisor Services. 

DISCLOSURES:
Speaker 4: Schwab Advisor Services serves independent investment advisors and includes the custody, trading and support services of Schwab. 

The comments, views, and opinions expressed in the podcast are those of the speakers and do not necessarily represent the views of Schwab. They are provided for informational purposes only. 

Experiences expressed by advisors may not be representative of the experience of other advisors and are not a guarantee of future success. 

The above-mentioned firms and their employees are not affiliated with or employees of Schwab unless otherwise noted. They should not be construed as a recommendation, endorsement of, or sponsorship by Schwab. Data contained herein from third-party providers is obtained from what are considered reliable sources. However, its accuracy, completeness, or reliability cannot be guaranteed. Copyright 2019 Charles Schwab & Co., Inc. All rights reserved. Member SIPC. 

Independent investment advisors are not owned by, affiliated with, or supervised by Schwab. 

Compliance Code: (1219-96S1)
 

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After you listen

Your client relationships are your most valuable asset. During a crisis, are you empowered to act? Discover how the strength and agility of the independent model helps investment advisors get creative and stay responsive. 

Wanting More: Work-life balance >

At 41, Jesse Giordano was at the top of his career. But he didn't feel like it. He was no longer happy—and it was taking a toll on other relationships in his life. Then he co-founded an RIA firm and took back control.

Learn how going independent can be emotionally—and financially—uplifting. Your clients aren’t the only ones who benefit from more meaningful service.

Listen below or on your favorite podcast player: Apple Podcasts, Google Podcasts, Spotify or copy to your RSS reader. If you're new to podcasts, check out our tips for listening to podcasts

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Read the transcript

Jesse: It's six o'clock in the morning and I just get out of the shower. It's dark outside. The car service is waiting out ready to take me to the airport, because I'm flying down to Louisiana for a business trip. And, as I'm getting ready, I hear my wife; she walks into the guest room where I am, and she sits down at the end of the bed. And she noticeably hasn't been sleeping. She, her eyes are bloodshot. She's a little… You could tell like her hands are shaking. She takes a deep breath, and then she says to me, "What happened to us?"

Jerry: This is the moment when the life of Jesse Giordano changed forever.

On the outside, things were perfect: At 41, Jesse was at the top of his career.

He was an incredibly successful financial advisor at a large investment bank in New York.

He was lauded for his sales, his ability to attract clients and educate follow advisors.

He was married, had a beautiful house, a boat, and a solid group of friends.

But on the inside, Jesse was unraveling.

Jesse: From the outside, I looked like financial success and money success, but on the inside I was very unhappy. I felt very alone and had no idea how I got to this point in my life.

Jerry: Jesse would go on to make some drastic changes, which included quitting his job and launching his own firm, Opal Wealth Advisors, founded on principles that go beyond the conventional investment model.

He wanted to create a business that would transform his own complicated relationship with money, but also offer that service to his clients.

Welcome back to your insider's guide to becoming an independent Registered Investment Advisor, or RIA. 

I'm Jerry Cobb, Senior Business Consultant at Charles Schwab, and this is How I Became an Independent RIA, an original podcast from Schwab Advisor Services.™

Speaker 1: You get to the point where you're like, "You know what, the risk I can take to leave and be independent is absolutely worth it."

Speaker 2: I felt apprehensiveness, nervousness, but yet excitement. 

Speaker 3: You know that you can see the light at the end of the tunnel. 

Speaker 1: Really everything we wanted was possible.

Speaker 2: Even when it's hard or more than you thought, you still got to do it.

Speaker 2: Everything that stopped me from taking that next step was just fear and that fear was in the way of me actually being fulfilled.

Speaker 1: Complete freedom and happiness has been the result.

Jerry: Advisors take the leap to independence for a variety of reasons, but among the most common are a fundamental dissatisfaction with the status quo, and a nagging feeling that there's got to be a better way to serve their clients.

Today's episode explores the story of Jesse Giordano and his business partners' launch of their own independent RIA firm, Opal Wealth Advisors. 

It's a firm that goes beyond offering investment advice by emphasizing clients' broader relationships with their money and offering value-added services like life-coaching.

We'll hear about how Jesse and his partners made the transition to independence and established their firm.

Then, we'll check in with an industry expert to help us understand how typical Jesse's story might be and what lessons can be learned from it.

And, as always, we'll get a little practical advice, and bust a few myths about the RIA journey so you can learn from others as you consider your own path forward.

But let's go back to what motivated Jesse to take this leap of faith.

Jerry: Jesse grew up in a family of small business owners. His mother and father worked together at their garden center. 

It was clear that money was front and center in their lives.

Jesse: Every day around the dinner table, my mom and dad would talk about how many customers were there that day, what were the sales, and, from time to time, there would be conversations about, "There's not enough business," or "There's not enough profits," and worries about, "Are we ever going to make it through the winter?" Or, "Is there enough money to pay for college?" And I remember thinking to myself, "We can't be happy without money." Life became about money and success for me; it was clear to me in that moment that, if I didn't master money, that I would be unhappy in my own life.

Jerry: It was the desire to be financially stable that motivated Jesse to go into finance. But he soon found that the profit-driven culture of the financial industry fed an unhealthy relationship he had with money.

Jesse: You know, I remember thinking to myself, "If I just make $100,000 early in my career, but then I'll be happy and then I'll make it. And if I just make 200 and make 300 then... Being in that culture of the constant dollar chase, when every system was built around that, well, it wasn't the happiness and fulfillment that I thought would be there."

Jerry: Jesse rose through the ranks quickly. 

Years passed. 

He got hired by a large investment bank in New York. 

Professionally, he was at the top of his game but, personally, he was headed for a breakdown.

Jesse: It's six o'clock in the morning and I just get out of the shower. It's dark outside. The car service is waiting out ready to take me to the airport, because I'm flying down to Louisiana for a business trip. And, as I'm getting ready, I hear my wife; she walks into the guest room where I am, and she sits down at the end of the bed. And she noticeably hasn't been sleeping. She, her eyes are bloodshot. She's a little… You could tell like her hands are shaking. She takes a deep breath, and then she says to me, "What happened to us?"

I found myself that February morning about to embark on the very divorce that I was trying to avoid. 

Jerry: Jesse's marriage ended in divorce.

Distraught, he went to his close friends and colleagues, Lee Korn and Joe Filosa for advice.

But there was another issue eating at him. He was successful, but not happy at his current firm. He thought he could be doing more for his clients.

During this conversation, Jesse learned that Lee and Joe both shared some of his concerns about how well they were able to serve clients within the structure of a big firm.

Lee: The corporate culture was: How many credit cards can you cross-sell, and how many people, you know, are going to take out loans and how much money do we make on cash margin? When I started in this career, I was part of that machine. You know, it was about putting up numbers, being the best, being at the top of the leaders' board. How do you get better? How do you do more business? And it just got old. As time went on, those corporate forces of maximize profits, increase shareholder value; it just didn't align with what I was looking to do and what I was looking to deliver for clients.

Jerry: Like Jesse, Lee and Joe both wanted the flexibility to design a financial plan that would be more customizable to clients' needs, something that their current firm just wouldn't allow them to do.

Lee:  If you're at a big firm, your products and services are restricted to what is offered through that big firm. I'll give you a perfect example: A client is looking for a commercial loan, right? And if you're working for a big bank, or you're working for a big wirehouse, they have a lending department; you have a mortgage license with them. It's either their solution or no solution.

Joe: So, we weren't free to go and look at the best solution for the client pertaining to lending.

Jesse: And looking at the big firm, where the money is held, where the research, where the products and services, where the advice comes from−all from the same place in the big wirehouse. And there's conflict there: one feeds the interest of others.

Joe: I felt a little... Was it really in my client's best interest that I always, you know, use one company to provide lending, and so on and so forth?

Jerry: It soon became clear that, if they wanted the freedom to serve their clients in meaningful ways, they'd have to start their own firm.

Jesse: By working with an independent advisor, the advice is now not centered around the interests of what the firm shareholders are looking for but really around the client, and entirely around the client.

Joe: The motivation for me to go independent was freedom and flexibility to choose what's in our client's best interest, period.

Jerry: And Jesse was convinced that the firm needed to be founded on the personal realization that had changed his life.

That morning, when Jesse's wife asked him what had happened to their marriage, Jesse realized that he didn't know how to answer her.

And that despite all of his financial success, he was unhappy.

He began to examine his choices.

Jesse: I realized that everything that I was doing for the last 10, 15 years was shaped around that relationship, that decision that I made that you can't be happy without money. And I started to realize what actually gives us fulfillment: Remove money as the goal and put it in the background, and get really clear on what's really most important to us in life. And let that guide us, and align the right financial structures behind it to give it power and fuel for what was really most important for us to be accomplished. And that right there is when the idea of Opal Wealth Advisors began.

Jerry: The new firm had to offer something that actually ran contrary to the culture of finance that Jesse had experienced: It had to help clients who wanted to reshape their relationship with money.

Jesse: For better or worse, the financial services industry is really built around dollar being the endgame. But they were perpetuating this need for, like, "Whatever I have is not enough," and, "I need to get more of that and more of that." That had me focused on, for me, the wrong thing.

Jerry: So, instead of a singular focus on accumulating money, which Jesse learned could be an endless and unfulfilling cycle, he wanted his clients to see money as a vehicle for achieving their dreams and living the life they wanted.

His partners couldn't agree more.

Lee: It's not about the dollars and cents in the bank account. It's what that money is there for. What it is that it gives them? Does it give them freedom? Does it give them time to spend with their grandkids [00:22:00] when they retire? Does it give them the ability to travel? Does it give the ability to help their family members, to help their children, to help their grandchildren, right? So, it's not about the number. It's about, "What is that money there for? What is it in support of?" We thought, "Wouldn't it be amazing to stand for someone being fulfilled in their life, not just their pocketbook?"

Joe: Most people, they're really looking for, like, their life's purpose. It's not just the financial plan; it's almost like a life plan, where the catalyst for people to get what they want out of their life, and it doesn't just have to do with money.

Jerry: So, after many conversations, Jesse, Lee, and Joe, agreed to take the plunge and start their own firm, founded on the principal of helping clients achieve their dreams. Their firm needed someone on staff whose role would speak directly to this goal: a life coach.

Joe: Our clients' performance is helped and aided by coaching. Coaching could be around, "I'm not communicating with my spouse. I'm not communicating what my kids." And I think that's a really amazing value add. 

Jerry: Launching their plan to go independent would take a little over two years. After all, they were all still working full-time at the wirehouse, so the work of planning a new business was done during evenings and weekends.

Joe: It was just an awakening, I guess, or a realization how many pieces to the pie there are in creating a firm. Like, I had no idea what a "custodian" meant. I had no idea what a reporting system is, you know, a UMA platform. I knew what a UMA was. But like, what is the difference between a UMA and a trading system? It was a lot of learning and, at times, it was very overwhelming. 

Jerry: But they were committed.

They did what all advisors do when taking those first steps towards independence; they built a plan.

Lee: Every Saturday for four or five months, we would get together with our respective teams, and we would all put ourselves in a room and we said, "If we were going to do this, what would it look like? Let's build it." We have a white piece of paper. How would we manage our investments? How would we do the planning? How would our, what would our service model look like? You know, how would we charge? And on and on and on. And, after five months, we kind of looked at it and said, "Wow, this looks pretty great. We've built something that's amazing. It's in service to the client." And we said, "Let's do it."

Jerry: But the decision wasn't free of anxiety.

They had all the typical worries that advisors have when going independent: Will my clients follow me? How will I find the right vendors? Will the firm be successful?

They started to feel the gravity of their decision when they were about to sign the lease for their new office space.

Jesse: We were signing up for rent for $18,000 a month, and this was real, the real point. And then Joe, Lee, and myself, and we're arguing whether we're going to sign the lease agreement and every fear came up. Like, is this the right idea? Should we make any changes? Am I getting a bad deal on this thing?

Lee: And I think that heated conversation was probably fueled by nerves, anxiety, fear. This was the moment where, you know, you always hear about the business owner who is getting ready to sell his business, and he's at the table and his hand is shaking and the pen is shaking.

Joe: That was the moment I was like, "I'm getting on the roller coaster right now, and this is it."

Jerry: They all signed the lease. Things were moving forward. Soon resignation day arrived.

Jesse: I'm sitting in the office and it's 3:58 pm on the day that we're resigning. Lee says, "All right, guys. Let's do it."

And I walk into his office like, "Oh, don't you think we should wait a little bit? I don't know about some of these advisors here. There's a lot of advisors in the office. They're going to be calling our clients. Maybe we should wait to four o' five, maybe we should wait to four o' 10. And then Lee goes:

Lee: "Someone has to be there to accept your resignation, right? So, what happens if the manager's not there? How does it play out?"

Jesse: And then Joe walks in: "All right, let's just do it." 

Joe: I was nervous. But I was like, "We got this." I was ready. 

Jesse: And we take our cards out for the lock, that unlock the doors. We throw them on the table and we walk down to our manager's office and we peek in the window. And he's on the phone and he goes, "Okay." He just turns to the person on his phone and he goes, "I gotta call you back."

Lee: It was scary.

Joe: He was disappointed, and he said the funniest comment. He was like, "I hope you're going independent."

Jesse: Then we shake his hand and we say "thank you" for everything. And we walk out the door.

Lee: And it was the biggest relief. It's like a thousand-pound weight had been lifted off my shoulders because I wasn't thinking about, "Oh, I have to resign." I was thinking about, "All right, now what do we need to do to be successful? What do we need to do to launch Opal? What do we need to do to make this a success?"

Joe: I felt excited. I was actually excited that we left on our terms. I was relieved and I was ready to get to work. 

Jesse: I walk outside my building and I think to myself, "Oh my god, I just quit my job at 42 years old. I've taken on a big rent with all this payroll, and I don't know if clients are going to come."

Jerry: But the clients did come.

90 percent of them followed Jesse, Lee and Joe to Opal Wealth Advisors.

In 2019, the company opened its doors in Jericho, New York.

And, Jesse didn't forget what started him on this journey. He wanted to be sure his clients had access to the same kind of insight that helped him redefine his approach to money. So, the firm has a full-time life coach on staff for its clients—and employees.

Jesse: So to have, not just an experienced life coach, but someone who is really exceptional on staff, to work with clients and work with our advisors, to help us uncover what people really want and what's going to make the biggest difference for them.

Jerry: Going independent allowed Jesse and his partners to build the kind of firm they wanted to build, and that has transformed their experience of coming to work.

Jesse: It's just a real inspiring, fulfilling reason to get up in the morning. Like, I get up every day proud that the work that I'm doing as an advisor and as a business owner is actually making an impact that's profound in people's lives. So, it's more than just the money; it's about people.

Joe: When I wake up in the morning, I'm excited to come to work. I've never felt like, "Oh, I have to go to the office." I'm proud of what we've built. I feel accomplished. I'm excited for what's to come.

Lee: How has it changed my life? I walk into this office with a smile on my face. It doesn't matter if I'm busy; it doesn't matter what happened the day before. When I look at my partners and my teammates, I am elated. I love the fact that Jesse, myself, and Joe, and all the team, are growing a firm that is going to get bigger and bigger and more successful, and we're going to hire more people.

Mindy:  I think what struck me most about Jesse's story is how similar it is to every other breakaway I've worked with.

Jerry: Mindy Diamond is the President and Founder of Diamond Consultants, a firm which helps advisors make the transition to independence.

Mindy: At the end of the day, it's almost always the story of an advisor who is successful enough. And there are a series of pain points and, almost kind of, a straw that breaks the camel's back, that brings them to the brink and makes them realize that either they had entrepreneurial DNA that they weren't getting to leverage, or because there was just so much pain that they were unable to service clients the way they wanted to and grow the way they had hoped to.

And that there were goals or visions or ideas to want to build something that they just couldn't where they currently are. And that was true in Jesse's case. And it's true in almost every breakaway scenario I've facilitated, and I've facilitated many.

Jerry: It's true that motivations for going independent come in all shapes and sizes. Some advisors, like Jesse, experience a grand awakening while, for others, it's more of a buildup of small frustrations. But, either way, you don't necessarily have to have a grand vision to be successful at starting your own firm.

Mindy: The ecosystem that's been born in the last number of years to support this breakaway movement makes it so that an advisor really doesn't have to be Bill Gates or Mark Zuckerberg, in order to be entrepreneurial and go independent. He or she needs to have a desire. They need to have a strong client base and trust and belief, not only in the portability of those clients, but in the ability to continue to grow that business. There does have to be a certain amount of desire to be a business owner, but you don't have to be an ultimate entrepreneur, because there's so much scaffolding, or support, available in today's environment that there's lots of help to get there.

Jerry: According to Mindy, who has been working with advisors for over 20 years, a successful transition to independence really depends on the following factors:

Mindy: One, it's about being really self-aware and honest, brutally honest about what your strengths and weaknesses are. 

And secondly, super clear on the why you want to go independent and the what it is you want it to look like. There is no shortage of consultants, where an advisor can really create a war chest of education to really be aware of what the potential pitfalls are, the risks, and make a very well-educated, well-intentioned move.

And I think, third of all, it's about really making sure that you're willing to pull together the right band to support you. But if you go back to point number one about being self-aware, and you realize that you are not necessarily someone who is uber-organized or who has a ton of time to really spend on building a business. And that self-awareness might say, "I want to do this, but I need to bring in outside counsel, whether that be a service provider or a consultant." I mean there's no shortage of people you can pay in order to round out your knowledge.

Jerry: But either way, advisors all tend to have the same response when it comes to how they feel about having gone independent.

Mindy: The one common refrain we hear every single time without exception is, "I only wish I had done it sooner." I've never met anyone that regretted doing it. Advisors feel a renewed sense of energy; a renewed sense of passion and excitement for the business; a real enthusiasm about gaining freedom, flexibility, and control; a renewed sense of connection to their clients, because they feel more genuine, more authentic in connecting with clients. Because everyone's sitting on the same side of the table as opposed to feeling like they need to sell a certain product, or do certain things, just to meet the needs, the directives of the firm that they came from.

Jerry: Mindy Diamond is the President and Founder of Diamond Consultants, a firm based in Morristown, New Jersey and New York City.

Jerry: It hasn't been very long since Opal Wealth Advisors opened its doors, but I wanted to check in with Jesse and talk about his experience of starting an independent firm.

Jerry: What were some of the most important tasks that you had to go through to make that journey to independence?

Jesse: Hiring our marketing firm was a real critical component. To see the ideas come to life as expressed in the colors and the words and the website and, to see something that we felt internally and talked about be expressed in reality−that was an exciting part of the process.

So, selecting our marketing firm, but also, all the technology components and, "Who is going to be our reporting company? What are we going to use for our portal? What financial planning tools are we going to use?" At first, it was like, "We want everything," because everything was so exciting. But then, as we started to identify the tools and the pieces that really fit us best, it started to get clearer, you know, which were the ones that really expressed who we wanted to be.

Jerry: How did you go about setting up the leadership and governance structure for the firm? In other words, how did you decide who does what and the roles and responsibilities of your individual team members?

Jesse: We started to look at, between Joe, Lee, and myself as the partners of the firm, "Where are our passions? What are we really good at? What do we love to do? Where are we most productive?" And it started to reveal itself when we looked at technology, when we looked at marketing, or about the investment products and the insurance products, and the asset allocation, finances, HR issues. We took one by one and said, "Who on the team is best suited to manage these different pieces and, you know, do they want to?"

Jerry: What would you say you can do now in terms of serving clients? 

Jesse: So, there's just a lot of different components. I think the greatest value is the flexibility to explore those different pieces and to see if they're a fit. So, we get to create who we want to be for the clients that we want to serve.

Jerry: What does it mean for both your clients and advisors in the firm to have a life coach on staff?

Jesse: Well, Charles, he's here for the staff and he's here for clients. Each staff member sits with Charles once a week for a 45-minute session to work on things that are important to them. And that could be as it relates to our firm Opal Wealth Advisors, or it could be something that they're working on with life. So, we believe that if the staff here is living a life that they want to live and they're fulfilled and they're lit up and they're moving and growing in life, that that will show up in their performance as employees.

As for clients, at first clients were like, "Well, how does that fit? How does that work?" But they soon experienced the profound impact that it has. It's a coaching conversation to help clients discover what it is that they really want from their life. It's not just financial in nature, but rather, it's broad. It could be "a better relationship with my spouse." It could be "more time with my children." And as those various life goals started to take shape, what we started to see is that almost all of them at some level had some sort of relationship with money in some capacity. 

So, as we put, we got all the life goals out in front and center, and then we started to build a financial plan that helped them fulfill those various life goals. The clients started to see the connection between their life plan being fulfilled and their financial plan being fulfilled. We saw couples and spouses working together to accomplish their financial plan much better than had they not sat down to set those goals and create them together.

Jerry: So final question for you: How would you say your professional and personal life changed as a result of going independent?

Jesse: So, I get to wake up every morning feeling fulfilled and excited that I get to lead a life that aligns with my own personal values. I think what that provides for me at the end of the day is, like, the opportunity to really integrate my personal life and my professional life as one. Rather than something I just, at 5 o' clock, close the door on, and I go home and now I'm a spouse, a friend. You know, it's not like I have these different roles in life. I'm me and I get to be me everywhere.

Jerry: Jesse Giordano is a financial advisor and principle of Opal Wealth Advisors in Jericho, New York.

Today's episode explored the genesis story of Opal Wealth Advisors and what can be learned from their transition to independence.

If you're thinking of going independent but don't know if you have what it takes to launch a successful business, here's some pointers:

Even though Jesse's motivation for launching Opal Wealth Advisors was dramatic, yours doesn't need to be. Just wanting to have more freedom to better serve your clients is often enough. 
 
One of the keys to success is knowing your strengths and limitations, which point to the areas where you might need help launching your firm. There's an entire industry of consultants, custodians and service-providers whose job it is to help make the transition to independence smoother and fill in any gaps you might have in your knowledge. 

And although Jesse's firm decided to offer life coaching as a unique client-centered service, not every firm needs to offer the same thing. One of the many advantages of going independent is that it allows advisors to provide customized services that speak directly to the needs of their clients. 

Jerry: As you know, thousands of financial advisors across the country take the leap and become independent RIAs. 

Each story, and each transition, is unique. But the steps they take, and the support they need, is often the same. 

Learn more—lots more—about the RIA model, and how Schwab Advisor Services can help you forge your own path to independence. 

Find us online, at Schwab.com/RIA, or look for the link in the show description to this episode.

I'm Jerry Cobb and this is How I Became an Independent RIA. An original podcast from Schwab Advisor Services. 

DISCLAIMERS

Voice: Schwab Advisor Services serves independent investment advisors and includes the custody, trading, and support services of Schwab. The comments, views, and opinions expressed in the podcast are those of the speakers and do not necessarily represent the views of Schwab. They are provided for informational purposes only. 

Experiences expressed by advisors may not be representative of the experience of other advisors and are not a guarantee of future success. 

The above-mentioned firms and their employees are not affiliated with or employees of Schwab unless otherwise noted. They should not be construed as a recommendation, endorsement of, or sponsorship by Schwab. Data contained herein from third-party providers is obtained from what are considered reliable sources. However, its accuracy, completeness, or reliability cannot be guaranteed. Copyright 2019 Charles Schwab & Co., Inc. All rights reserved. Member SIPC. 

Independent investment advisors are not owned by, affiliated with, or supervised by Schwab. 

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After you listen

Jesse's story is inspiring. In fact, inspiration is what many investment advisors gain with the RIA model. Taking control can invigorate you and your career.

Introducing our host

Jerry Cobb, the host of How I Became an Independent RIA, smiles.

Jerry Cobb

Business Consulting, Schwab Advisor Services

Jerry Cobb spends his weekdays helping investment advisory firms address growth, profitability, and succession challenges. Jerry understands the entrepreneurial spirit of independent investment advisors. He built his own marketing firm that served small and midsize advisory firms. An award-winning journalist and on-air CNBC correspondent, he covered business and financial news for more than two decades. He was also a writer, producer, and reporter for the Financial News Network. 

Jerry lives in Phoenix and spends weekends trying to keep up with his three teenagers and their large dog. And since he has hiked the Grand Canyon from rim to rim in a single day, he does a good job keeping up.

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Ready to talk about independence?

Switching to the RIA model is a big step, and it helps to talk it through. Our experienced consultants are here to answer any questions you might have on a confidential phone call.

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The above-mentioned firms and their employees are not affiliated with or employees of Schwab unless otherwise noted. They should not be construed as a recommendation, endorsement of, or sponsorship by Schwab. The views expressed are those of the third party and are provided for informational purposes only. Third-party firms and their employees are not affiliated with or an employee of Schwab. Experiences expressed by advisors may not be representative of the experience of other advisors and are not a guarantee of future success. The data contained herein from third-party providers is obtained from what are considered reliable sources; however, its accuracy, completeness, or reliability cannot be guaranteed.

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