The opportunities of independence: Advisors tell their stories

Clients come first. It's a simple idea that can be hard to carry out in a traditional wealth management model where commissions and bureaucracy can come between advisors and their clients.

This is one big reason why more advisors than ever are interested in the independent RIA model. In fact, 98% of advisors who recently transitioned to an independent RIA did so because they wanted the freedom to do what's best for clients.¹

While making the move to independence can feel daunting, there's a strong ecosystem of industry support, an engaged community of advisors, and custodians like Schwab paving the way for new independent RIAs.

Advisors like Malcolm Ethridge, who founded Capital Area Planning Group, Casey Witters, president and CEO of Optimize Financial, and Todd Resnick, cofounder of OneSeven, have realized that the RIA model enables them to serve clients without compromise. Read about how they discovered the benefits of independence and are building the firms they've always wanted.

Client-focused service

For Witters, clients are like family. "You have to love and care about the client," she says. "This helps us be the best possible advisors for them."

RIA firms like Optimize Financial can deliver this level of service because they have the flexibility to decide how to meet client needs. They can choose their ideal clients and by being on an open architecture platform, they can select investments that match client needs. These are a few of the reasons why 74% of advisors say that they can build better, longer-term relationships with their clients after going independent.²

Becoming an RIA allowed Ethridge to do what he'd always wanted to do: create financial plans for clients and help them realize their dreams. He can now offer his clients personalized support without having to put other priorities first.

"I can gladly say I made the right decision going to true independence, where there's literally . . . no barrier to us answering any of our clients' questions. That was definitely the right move," Ethridge says.

Freedom of choice

Going independent as an RIA means you don't have to conform to someone else's goals.

Independent RIAs have more influence over business decisions, from compensation structure to technology platforms. They can run their business in ways that make sense to them and potentially benefit their clients.

Witters turned to the RIA model because she had to spend so much time fighting barriers put up by her independent broker-dealer, which led to unsatisfying outcomes. There were too many inefficiencies that she couldn't control and that were getting in the way of her growth.

"There was a lot of bureaucracy—red tape that prevented me from serving clients the way I wanted," Witters recalls. "Going independent as an RIA became really the only option."

Resnick found that the independent RIA model allows him and other advisors to "create something that is truly unique based on what you're passionate about." Building his own firm allowed him to stop doing the things he didn't want to do and instead focus on helping other advisors be their best for their clients. "You get to really build a business that puts the client first and allows you to get rid of the noise," he says.

"I can gladly say I made the right decision going to true independence, where there's literally . . . no barrier to us answering any of our clients' questions."
-Malcolm Ethridge, Capital Area Planning Group

Income potential

A few years ago, Resnick had some eye-opening conversations with advisors who had gone independent. They explained how the finances of an RIA firm compared with compensation at his wirehouse firm. Once Resnick reviewed the numbers for himself, he was ready to start thinking differently.

"We weren't getting as much as we thought for the money," he recalls. "It was time to start looking at the financial services space in a bigger light."

Many advisors find that independence increases their earnings because it gives them more control over their fees and expenses, equity that can be recovered through a sale or merger, and the opportunity to attract new assets that weren't available to them in other models. In fact, most advisors report greater AUM after going independent.³

Opportunities beyond portfolio management

Many RIAs are moving beyond portfolio management, taking on high-touch, in-demand services such as tax and estate planning to help them deliver more value to clients and stand out in the marketplace.⁵

But being independent doesn't mean you have to do it all. When you call the shots, you also have opportunities to collaborate with advisors and professionals who specialize in particular services. The RIA model gives you the flexibility to decide what's important to you and allows you to build a network that aims to benefit you and your clients.

An industry of opportunity

The RIA industry continues to gain market share as more advisors and investors understand the benefits of independent advice. In fact, advisor-managed assets for independent RIAs grew by 17.5% year-over-year between 2013 and 2023.⁴

One reason for this growth is the ecosystem of tailored support to help independent RIAs thrive. When Witters decided to make the move, Schwab was by her side to walk her through the steps and strategize with her about how to build the firm she wanted. They also made sure she had the third-party support she needed, both through the transition and beyond.

"They connected us with some great people: compliance, lenders, [real estate professionals who helped us] secure a building," Witters says.

An expanding RIA industry also means more opportunities for inorganic acquisition. Resnick's firm has brought on advisors looking to join a firm rather than build their own from scratch. And for advisors who want to maintain full independence but need help with operations or compliance, they can affiliate with a large firm that offers both autonomy and support.

Support to choose your path

No matter which path you choose within the independent RIA model, Schwab's team can help you navigate your transition with a full spectrum of support. "If you're an advisor who's considering going independent, and you're not sure where to start, I would say just talk to Schwab," Ethridge says.

With Schwab, advisors find that they're getting more than custody, technology, and the power of the largest RIA custodian. They get a level of dedication and support that often exceeds expectations. "They were excited about us," says Witters. "They knew that going independent was going to be a gamechanger for us."

Ethridge says he often talks to captive advisors who are curious about the RIA model but are afraid to make a change. "I'm happy to be an evangelist for the independent space to any advisor who asks," he says. "I let them know . . . the grass truly is greener on the other side."

What you can do next

• Want to learn more about the potential advantages of the RIA model? Schwab can help.
• Get next-level clarity and momentum to help fast-track your growth as an independent advisor. Explore how the Schwab Advisor ProDirect™ fee-based program can help fuel your next move—and every step after that.
• Consider a custodian that is invested in your success. Contact us to learn more about the potential benefits of a Schwab custodial relationship.