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Do Independent Advisors Earn More Money?

Do Independent Advisors Earn More Money?

Chances are, your decision to go independent was based on many things, including a desire to be your own boss, put your clients first, and offer the services and products you want. Did money play a role in your decision too? While it might not have been the determining factor, you probably looked into the numbers to decide if taking such a leap of faith would be worth your time, investment, and energy. 

If you’ve already made the switch from a wirehouse to working as an independent advisor, you probably know that the satisfaction of working how you want, with whom you want, and when you want was worth the risk. But if you’re just starting to consider a change, we thought it’d be helpful to break down the big question of payout for you.

How Different Advisors Are Paid

Wirehouse advisors, or those who work for a large financial institution, often see a significant chunk of their earnings go back to their company, possibly up to 60%. (1) A lot of what you earn is probably tied to selling products that offer you a commission, and you might even be told what products to sell and what stocks to guide your clients toward. While there is a shift happening in the financial industry, with more advisors being paid a salary, the majority are paid on a grid model that rewards advisors for their performance. According to Investment News, wirehouse advisors can earn 35-45 cents of every dollar generated by the grid. So, if an advisor brought in $1 million in revenue, they’d earn $350,000-$450,000. (2)

As a Registered Representative, there are a variety of ways you can earn your money. Whether you are fee-based or fee-only, if you charge by the hour, by service bundle, or by a percentage of AUM, going independent can allow you to retain payouts that can range from 85-92%. (3) But what you bring in is only part of the story. Just because your money isn’t going to the coffers of a large wirehouse doesn’t mean it’s not needed to cover the many expenses involved in running an independent firm.

Who Carries The Burden?

A wirehouse offers incredible support to their advisors in that they take care of marketing, pay the electricity bill, and provide all the technology you need. But you sacrifice pay, freedom of choice, and the ability to select your own clients. 

As an independent advisor, that’s all on you. Every penny that goes out has to come from the firm’s profit. When you make the switch, your start-up costs include licensing and incorporation fees, payroll, insurance, office space, marketing, etc. Then you’ll have all your ongoing costs of technology, employees, utilities, training, and more. 

But don’t let that discourage you. In Schwab’s Independent Advisor Sophomore Study, 96% of advisors who turned independent said they would do it again, and 66% wish they had done it sooner. There will be bumps in the road, but building something from the ground up is incredibly fulfilling with plenty of rewards to go along with the risk. And at the end of the day, many advisors retained over 80% of their clients in the move and saw their revenue increase by 70%. (4)

What’s Your Move? 

The bottom line is that the ability to make more money as an independent advisor shouldn’t be your sole reason to leave your wirehouse firm, but it is an important consideration when weighing the pros and cons. In all likelihood, you want to start an independent career because you desire freedom and autonomy in your work and have a passion for meeting your clients’ needs and putting them first. We think you deserve higher payouts for that. 

At Freedom Wealth Alliance, we are advocates for independent advisors. We don’t want to see any of the potential obstacles deter you from this making this life-changing decision. That’s why we provide you with all you need to succeed as an independent advisor, from investment management to affiliation options to technology. We can even help you set up your own branch, taking care of every detail. Learn more about our firm and its distinctive advantages by visiting You can also email us at or call Kurt Rozman at 262-798-7979.

About Freedom Wealth Alliance

Freedom Wealth Alliance is a Registered Investment Advisor providing a home and multiple affiliation options for financial advisors seeking business growth and/or succession planning, operational excellence, and turn-key placement. We created this firm to relieve your stress no matter the stage of your firm. We take the burden of running the business off your back, so you can spend your time doing what you do best and love the most. If that means spending more time with clients and prospects, you can. If that means spending more time with your family, just do it. Visit and sign up for a free account to access all the tools and resources we have developed to help you transition to true freedom and business ownership.

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