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Key Steps to Breaking Away

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There is one overwhelming consensus that keeps financial advisors from declaring their independence: breaking away is difficult and puts that business at risk.

However, this isn’t always true.  The move to independence can often be executed seamlessly, and result in a new firm that is positioned for greater success and faster growth.

Now, starting a new business is no stroll in the park. But there are key steps that can be simplified and expedited by taking on an experienced partner. Also, it is critical to take a view from above, to understand the totality of creating a top caliber business and service model, while keeping the endgame in sight.


If you choose to go it alone, the process can be complex, time consuming and a distraction from your client focus.  For the “rugged individualist”, this option may be attractive, but will require a full-time commitment and a deep bench of support and operations staff.

The alternative is to enlist a trusted partner to help drive your transition – a person or a firm that has experience in the process, knows how to navigate the complex web of logistics, and can guide you to independence.

Today, there are a variety of firms that can partner with advisors who want to move to independent business ownership.  But before going that route, an advisor should consider that not everyone is cut out to go on their own. It takes an entrepreneurial spirit, a business-owner’s mindset, and accountability.  At the end of the day, you will be running your own business.  You are responsible for every win, and every misstep.


It is important to look at your motives. Is this move about freedom? Control? Gaining access to new products and services? Or is it about compensation? 

Do you want to build ownership value creating a lasting legacy? Achieve a more balanced life? Or perhaps free yourself from the congestion of corporate bureaucracy?

At the forefront for most advisors is having a strategy for better serving clients, and one which drives the success and growth of their practice.  Often, advisors can use these motivators to create a vision, and mission statement, with guiding principles that help them determine the right path for their new business.

The first step is self-discovery and due diligence, to ensure that building an independent firm is right for you. A commitment to a transformative process follows. With dedication and enthusiasm, independence can come after only three to six months.


Once you know whether this is the right choice for you, and you need to determine what structure will best position you for ongoing success. 

Experience and industry trends show that advisors seeking independence do extensive due diligence on the business models available to them.  They can join an independent broker-dealer, or an established RIA. Some launch their own RIA.

The right choice is largely based on individual preference. Typically, by the time an advisor meets with a so-called breakaway firm, which provides services and support for going independent, they have done a significant amount of homework on the topic, and already have developed a basic framework of what they want.  What a difference from a few years ago, when there wasn’t much information or resources for doing the research. Choices were limited, and technology was lacking.


And advisors can count on having their clients stick with them on their move to independence. Today, clients increasingly trust their advisors more than they trust large corporations, particularly since the financial crisis. Greater client loyalty has motivated successful advisors who want to take control of their businesses, and even reduced their trepidation about breaking away. 

If you know that most of your clients will follow you, then the entire process becomes less risky. In my next blog: Financing and capital needs, legal considerations and client transition.

Shirl Penney is the founder of Dynasty Financial Partners, a firm which provides infrastructure and support services for independent investment advisor teams. 

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