With wirehouse advisors increasingly departing the captive environment for the independent channel, there’s no shortage of advice for handling the logistical nitty-gritty of this major career change. But moving to independence isn’t just paperwork and a new business name; it’s a major leap of faith that requires a great deal of emotional labor. Before transitioning, here’s how advisors can navigate that “softer” side of breaking away, from knowing if you’re ready to communicating with clients.
Know Your True North
Wirehouse advisors exist in a competitive environment, balancing the needs of clients with the priorities of a large corporation and its shareholders. Although there are many carrots (e.g., incentives, promotions and stock options) in a corporate entity, are they fulfilling enough on their own? Why do you do what you do as an advisor? What brings you back to work every day? If your answer is “I like helping people,” what does this mean to you, and, more important, have you been able to remain true to this while working for someone else?
To go independent means creating your own true north—figuring out why you’ve chosen to work as an advisor, what kind of clients you want to serve, and how you can do that in a way that’s sustainable and successful for you and your clients. Deep soul searching is needed here; it’s a step you shouldn’t skip.
Accept The Unknown
If you’re contemplating breaking away, your list of unknown quantities may be lengthy, and that can be scary because we tend to fear what we don’t know—especially when, as a financial advisor, you may tend to be more risk averse. As an independent business owner, you’ll be responsible for everything from where your office will be located to making sure it’s stocked with pens. Your payout will change. How you serve your clients will change.
The good news is we can use the known to explain the unknown. Even if you’ve never run your own business, you’ve certainly run (or helped run) your household. Meet with other advisors and consultants familiar with the process of going independent, you will find that your skills are much more transferrable than you thought.
Prepare For Tough Conversations
Whether you’re informing your employer that you’re leaving, saying goodbye to trusted colleagues and support staff, or explaining your departure to clients (and hoping they come with you)—this period in your professional life will be rife with tough conversations. Explaining your move to independence will mean cementing your reasons why, and possibly having to sell yourself all over again—yes, even to longtime clients. You will also have to discuss your potential move with loved ones to explain the rewards and risks associated with independence.
Turn to your true north here. Your official resignation should follow all rules set forth by your contract (you may want to consider the guidance of a securities attorney), and your conversations with clients should explain your “why.” Practice articulating to clients why this move is right for them, their assets, and their future, as well as yours. Be prepared for challenging questions—and be ready to let go of clients whose needs you can no longer meet or who simply won’t follow you. Decide ahead of time what kind of business you’d like to run and stick to that vision.
The process of breaking away can be a time of great upheaval for you and your clients. But it can also be a moment of tremendous clarity for advisors who dig deeper for reasons to choose independence. And, just like most moments of introspection, it’s a journey that can lead to personal fulfillment and professional success.
David Israel is vice president of field outreach at Commonwealth Financial Network.