Financial advisors face a ‘fear gap’ when considering leaving a wirehouse to set up an independent shop, said Robert Bartenstein, CEO of Kestra Private Wealth Services.

It is a gap that has to be bridged if the entrepreneurial advisor is to succeed, he said.

Bartenstein said leaving a full-service broker-dealer to become an independent advisor can seem like an overwhelming proposition to an advisor, but the number of advisors creating their own firms is a growing trend. Independent advisors now manage more assets than wirehouse employees.

“There will always be a place for wirehouses, where advisors are employees,” Bartenstein noted. “There is room for both.”

Bartenstein's firm, which is part of Kestra Financial in Austin, Texas, is among those that have been created to provide support and services for entrepreneurial advisors who want the freedom of independence, which creates more options for advisors than existed a decade ago.

Once an advisor or team of advisors decides to go independent, there are a wide range of things to consider in addition to how to best provide client-facing services, he said.

“Who is going to step up and offer to be the chief compliance officer? What advisor knows much about real estate? Who is going to be the technology expert?” Bartenstein asked. Support firms help handle these details so advisors can maintain and build their advisory skills and provide as much time as possible to work with clients, he said.

For many advisors, the attraction of being their own bosses outweighs any fears they may have of making the transition to independence, he said. 

“One of the main attractions to being independent is being able to create your own brand,” Bartenstein said. “Advisors should start early thinking about what their brand will look like and how it will reflect the advisor as a person. As an independent, an advisor has the freedom to do things his or her own way. Clients feel the excitement that creates for the advisor and it helps build loyalty.”

Legal considerations must be adhered to in any move to set up an independent firm, added Bartenstein, who also is a lawyer.

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