Where Firms Need to Focus
But maybe the most important part of the independence discussion shouldn’t even be focused on what individual advisors do and don’t need to know. Instead, we may want to focus our attention on the RIA firms and the aggregators who are trying to recruit more and more advisors to their firms.
Firms need to focus less on restrictive advisor employment agreements that give wirehouse-like power to retaining clients, and instead make sure that their focus is on retaining their advisors.
And how do you keep advisors with your firm? You do it just like you would with investors. You provide them with fantastic service that makes them feel unique and empowered. When advisors are given the resources they need for success, there’s less concern about them leaving and starting a competing firm, because they aren’t looking for reasons to leave.
Rather than spending money to lawyer up and defend yourself against advisors who might take some of their clients with them to a new firm, spend money to be additive to an advisor’s career to keep them with you.
You’ll likely spend less money in the end and keep more assets (not to mention great people) with you at the same time.
Ryan Shanks is CEO and co-founder of FA Match.