The past few years have driven many professionals to reevaluate their work and career goals. Remote work introduced individuals to a level of autonomy, self-reliance, and independence they might not have experienced before. And for those who enjoyed this newfound freedom, they may be thinking about how to secure it for the long term.
This is one of the many reasons advisors consider breaking away. The ability to blaze your own trail can be liberating, but with greater independence comes more responsibility. The decision to become a breakaway financial advisor is not one you should take lightly. There are some essential things to think about before making the move.
Let’s look at five crucial considerations for any financial advisor thinking of breaking away.
FREE RESOURCE
Looking for more educational resources? Grow your business and meet CE requirements with our free learning platform.
Learn to Grow with Orion Advisor Academy
1. Strong Partnerships Matter for Breakaway Advisors
As John Donne wrote, “No man is an island.” Advisors who choose to break away often do so for autonomy, but even they will not work entirely alone.
Whether you’re breaking away to become an independent advisor or to join an existing RIA, you’ll still rely on partnerships. And before you leap into any foundational relationships, you’ll want to do your homework.
As you assess the organizations and individuals you may partner with, ask yourself the following questions:
- Does this prospective partner offer me the tools and support I need to serve my clients?
- Does their way of working align with how I plan to structure my business?
- Do we share values and mission, and are we aligned on growth objectives?
- If this is a vendor relationship, does their cost and billing work with my projected earnings and ideal fee structure?
- How does this prospective partner fit in with others I’ve spoken with? Is there any overlap between them? Do they leave any gaps I’ll need to fill with another partner or solution?
These are questions you should consider when evaluating any prospective partnership. Whether it’s a potential RIA partner, custodian, critical tech provider, or other individuals you hire to help you run the business, digging deep and asking how businesses or individuals align with your goals, work, and ethos is crucial to finding the right partners.
2. You Need Time and Space To Do Things Right
If you’ve been thinking about breaking away for a while, you may be eager to make the change today. However, becoming a breakaway advisor is a big decision that requires up-front work and investment, and it’s not something you can do overnight.
Instead, consider laying the groundwork while you’re in your current role. Create a business plan and identify the potential vendors and partners you’ll want to work with. Start talking to these people and exploring your options.
As you do, you’ll gain a more realistic sense of the timeline for going from your current role to a fully operational breakaway advisory. From there, you can work backward and build out a calendar with ideal timelines for each step of the process.
Creating lead time isn’t just vital for yourself and any business partners you work with; it’s also crucial for maintaining an excellent client experience. You’ll need time to alert your current clients to your decision to break away and to ensure the transition goes smoothly. Build your clients’ needs into your timeline as well.
Depending on how you’re structuring your new venture, you’ll want to assess your needs for capital, too. Establishing your own business comes with many up-front costs, from securing office space to hiring staff to buying hardware and software. Decide whether you’ll be able to finance this on your own or will need to take out loans, and then add any time it will take to secure financing into your timeline as well.
3. Client Expectations Are Higher Than Ever
If you’ve been in the industry for a while, you likely already know that client expectations are sky-high. Today’s investors want constant access to their advisor’s expertise, and a tech-enabled, highly-personalized experience.
McKinsey reports that 50% of high-net-worth clients say their primary wealth manager should improve their digital capabilities. And they expect that tech to enable personalization — that same article notes that personalization is the third-most important factor clients weigh when selecting a financial advisor.
Advisors with legacy platforms and old ways of working may be at a disadvantage here; it can be harder to reconfigure your existing setup than to establish something new. As a breakaway advisor, you can set your practice up for success from day one with a modern, tech-enabled client experience.
Dazzling your clients from the start will also help to ease the transition from your current brokerage or wirehouse to your independent advisory. If your new technology and services are more high-tech than your current setup, it will make it easier for clients to decide to follow you.
4. Breakaway Advisors Need the Right Tech Stack
The key to delivering an excellent client experience is engaging a leading-edge, comprehensive fintech provider.
Unfortunately, many advisors report struggles with integration between their core applications; 57% say this is their biggest technology pain point.
As a new breakaway advisor, you can do things right from the start. By selecting an integrated platform that unites all of your critical software solutions, you create a seamless client tech experience while also eliminating hassle and busy work on your side.
A cohesive tech ecosystem means you streamline your internal workflows, enhance accuracy and compliance, and have one source of truth and a central repository for all essential business information and data.
When evaluating tech providers, be sure to ask the following questions:
- How does your solution integrate with other key tech I’ll need for my firm?
- What kind of onboarding and ongoing support do you offer?
- How does your solution unify client-facing tools (like an investor app) with advisor and back-office tools?
- Does your solution make it easy to scale up and add new offerings as my business grows and needs change?
- Do you have partnerships with other fintech providers, custodians, business consultants, or other providers that could help support my business?
5. Breakaway Advisors Are Marketers and Salespeople, Too
With the freedom of becoming a breakaway advisor comes additional responsibilities in attracting and acquiring new business. The proverbial buck stops with you, and outside of a firm with an established name, you’ll need to hustle to attract prospects, win their trust, and close new business.
Referrals from existing clients will be a part of your strategy, but you’ll also need to connect with entirely new leads, which requires a systematic approach to marketing and sales.
This can be one of the most challenging parts of breaking away; you’re passionate about your work as an advisor, but you didn’t sign up to become a marketer and salesperson, too!
An integrated CRM and marketing solution can make it easier for a breakaway advisor. The right solution will give you access to existing marketing assets and pre-existing lead generation tools and tactics. This saves you from finding a marketing agency or attempting to do the work on your own.
Plus, the right CRM will offer marketing automation, which means you can set and forget your prospect outreach and only step into the process when a lead is ready for more high-touch engagement with a financial advisor.
The decision to break away is a momentous one. Becoming a breakaway financial advisor can offer unparalleled freedom and autonomy, but it also takes a lot of work to get up and running.
Take time to consider the financial, emotional, technical, and logistical side of breaking away before you make the leap. Once you’ve thought things through and have a concrete plan for moving ahead, you’re in a solid position to build a successful advisory practice.
EXPLORE MORE
One integrated UX. One agreement. All the power of Orion.
Introducing Orion Stacks