There’s a new horizon for the breakaway advisor and charting your own path has never been easier. More advisors are transitioning to the independent model, seeking greater control over their practices and their futures. The traditional broker-dealer firm model has seen a steady decline over the past two decades, while the independent registered investment advisor (RIA) channel continues to grow and flourish.
The promise of independence is alluring to advisors and continues to draw movement from the B/D to the independent and hybrid RIA channels. By 2027, Cerulli projects the channels will control nearly one-third (31.2%) of intermediary asset market share, continuing the trend of advisors and assets moving to these channels. For many advisors, this move is about gaining more freedom, flexibility, and growth opportunities. It’s no surprise that independent advisors report higher job satisfaction, more control, and increased earnings. Book a strategy session today.
Start with Your “Why”
Before taking the leap to independence, it’s crucial to reflect on your motivations. Most advisors’ reasons for going independent can be distilled into three main themes: flexibility, growth, and freedom. Let’s dive deeper into these key motivations:
1. Vision and Culture
Breaking away gives you the freedom to build a firm based on your beliefs and vision. You can offer your clients exceptional service on your own terms, without the constraints of a larger corporate structure.
2. Control
Being independent allows you to achieve a better work-life balance. You decide which products, services, and platforms best meet the needs of your practice and your clients.
3. Compensation
As an independent advisor, you have the potential for higher payouts while keeping your cost structure low. This can translate into greater financial freedom for you and your firm.
4. Create Value and Monetize Your Life’s Work
Maximize the value of your business by developing a clear value proposition, diversifying your client base and revenue streams, and structuring your business efficiently.
5. Legacy Building
Create a lasting business with a succession plan that ensures what you’ve built remains after you retire.
Understanding RIA Trends
The RIA space is expanding rapidly. To better understand what’s happening, here are some key industry trends:
1. The Number of RIAs is Growing
While established industry giants in the wirehouse channel make up four of the top five broker/dealer (B/D) firms when ranked by assets under management (AUM), financial advisors continue their move toward independence, seeking greater flexibility to run their practices as they see fit, according to the latest Cerulli Edge—U.S. Advisor Edition.
2. Personalization Is in Demand
There is an increasing demand for personalized financial advice. By separating advice from product sales, independent financial advisors are free to recommend a wider range of financial products and services.
3. New Tech for Old Obstacles
Technological advancements have made independence easier to achieve than ever before. With solutions ranging from admin support to marketing, and compliance tools, advisors can now overcome the fear of losing support from a large firm.
4. The Great Wealth Transfer
With trillions of dollars expected to change hands as the Baby Boomer generation passes on their wealth, there’s an unprecedented opportunity for independent financial advisors to serve a growing number of clients seeking expert guidance in managing their inherited assets.
Sowell Helps You Handle the “How”
Going independent doesn’t mean going it alone. Sowell is here to support you in navigating the challenges that come with independence. Here are some of the areas where we can help:
1. Investment Management
Will you have the resources to perform investment research, portfolio allocation, and due diligence?
Sowell Solution: We provide the tools to efficiently run an investment advisory firm and the freedom to choose from robust UMA/SMA investment management offerings.
2. Marketing and Communications
Do you have the time to build your brand, communicate with clients, and grow your presence online?
Sowell Solution: With our in-house marketing resources we offer comprehensive marketing support, from brand development to managing your online presence, and everything in between.
3. Technology
Do you have the expertise to select and implement the right technology?
Sowell Solution: Standalone technologies can be very expensive and time consuming for an independent advisor to implement, at Sowell, our technology solutions are included in our advisor offering and help to ensure seamless integration with your operations, boosting efficiency so you can focus on your clients.
4. Operations
Are you ready to manage daily operations?
Sowell Solution: The major custodians are increasingly targeting larger advisor practices and may no longer be the landing place for advisors that have no or little in-house operational expertise or staff. Our deep custodian relationships, advisor solutions team, and FLEX Connect platform will provide the day-to-day account management needs to give you more time with clients.
5. Compliance
Are you prepared to comply with current and changing SEC regulations and manage ongoing regulatory requirements?
Sowell Solution: Through thoughtful navigation of evolving regulations, our compliance team works to provide you with the confidence to stay focused on your clients.
Breakaway the Sowell Way
At Sowell, we help unlock advisor potential by providing the support and solutions you need. Our transformative platform empowers advisors with vision, voice, and value. Whether you’re breaking away for flexibility, growth, or freedom, Sowell is here to guide you from start to success. Going independent doesn’t mean going it alone — with Sowell, you’ll have a partner every step of the way. Book a strategy session today.
Sources
“RIAs Dominate in Advisor Headcount Growth“. Financial Advisor Magazine. URL-https://www.fa-mag.com/news/rias-dominate-in-advisor-headcount-growth-75282.html
“Independent Advisor Headcount Growth Rolls On: Cerulli”. ThinkAdvisor.
URL: https://www.thinkadvisor.com/2023/10/31/independent-advisor-headcount-growth-rolls-on-cerulli/
“Advisors Are Going Independent, With No Regrets“. Investopedia. URL-https://www.investopedia.com/news/why-more-advisors-are-going-independent-no-regrets/#citation-11
“Cerulli Edge – US Advisor Edge.” Cerulli Associates.URL- https://www.cerulli.com/edge/us-advisor-edge
“Eight Reasons Working With An Independent RIA Is A Great Choice For Private Clients“. Forbes.
