As margins have slimmed and the recruiting environment has grown more competitive, independent broker-dealers (IBDs) are increasingly fixated on building scale and creating volume at the expense of cultivating relationships with their independent financial advisors they serve.

With this shift towards growth for growth’s sake, the very independent advisors who chose this entrepreneurial path become a part of the crowd.

This commonly results in a substandard level of care and attention, as with each advisor added to any given platform, the advisors themselves become proportionately less valuable.

As we rethink how the industry should approach advisor-firm relationships, let’s consider the relationship that advisors have with their clients.

Good advisors spend a great deal of time getting to know each one of their clients, who they are and what’s most important to them. This is what allows them to construct, amend and fine-tune holistic financial plans.

Applying The Best Of Advisor-Client Engagements To Advisor-Firm Relationships

The best advisor-client relationships, however, take it to another level. The connection is close, personal and mutually beneficial for both sides, one that is grown atop a foundation of trust and respect.  

Nothing prevents broker-dealers and advisors from enjoying a similar bond. What we’re talking about here is celebrating independence while recognizing its limitations in the context of our industry by acknowledging this simple fact: broker-dealers and advisors are interdependent.

By celebrating and honoring this fact, rather than commoditizing it, one participates in what we call the “interdependent” model. 

Under this model, just as advisors have an appreciation of the hopes, dreams and motivations of their clients, firms strive to find out the very same things about the advisors they serve. Likewise, if the very best advisor-client relationships are bonded together by a shared faith in one another, then firms, working within an interdependent model, seek a similar partnership with advisors.

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