Making a career shift is not a decision to take lightly. It requires plenty of research and considering the pros and cons involved in such a shift. According to the Holmes-Rahe Life Stress Inventory, making a major business readjustment is more stressful than changing to a different line of work entirely. (1) And switching from a wirehouse to an independent advisor model is definitely a major business readjustment! We want to take some of the stress out of the decision by giving you a well-researched and thought-out pro/con list to help you make this important decision.
Let’s Weigh The Pros And Cons
Con: You’ll Need Patience
As wonderful as it would be to start out of the gate with a full book of business and an established brand, that’s not reality. You need to give it time, building relationships and reputation and setting the foundation for how your firm will work. Creating something from scratch requires patience and steadfastness. That being said, you don’t have to scrape by on your own. While success won’t happen overnight, the resources and support Freedom Wealth Alliance provides can give you a leg up by helping you grow your AUM, create a service model, or handle your technology needs.
Pro: You Have Ownership
Anything worth doing involves work and sacrifice. But at the end of the day, it’s incredibly satisfying to know that you have built something of value and are making an impact on others. As an independent advisor, you get the privilege of creating a business based on your values and ideas. All the hard work and effort you put in are growing your own business and brand, not someone else’s company.
Con: More Complications
Taking on more responsibility in the form of going independent is not a negative per se, but it does add more complications to your life. You’ll need to invest your own money, acquire the right paperwork and licenses, and set rates and standards for your services. If you have employees, you’ll have payroll to consider and you’re also going to need office space, furniture, and equipment.
Pro: More Opportunities
Despite the extra liability involved in going independent, you have the potential for a larger payout. In some cases, wirehouses can take up to 60% of your earnings, leaving you with less than half of what you should be taking home. Leaping into independence allows you to retain payouts that can range from 85-92%, and can even go higher based on production level and other factors. Plus, you have the freedom to choose when and how to work and the chance to partner with other professionals to offer a higher level of service to your clients.
Con: It’s Hard To Find Clients
There will be times where you work hard to prospect new clients and none of them pan out. Then there will be days you get multiple contacts all at once. Either way, you don’t have a large firm behind you with a massive marketing budget and a process that brings clients to your office. Since you need clients to make ends meet, this pressure can be overwhelming, especially since there’s a lot of competition out there.
Pro: You Can Be Selective
Becoming an independent advisor allows you to put your passion into practice. Is there a particular type of client you want to help or certain situations you handle best? Now you can call the shots and choose the clients you want. You don’t have to take in just anyone in order to meet quotas and keep your company happy. You can become the go-to person for a specific group of people or a specific financial concern and truly make a difference in their lives because of your passion and expertise.
What Are You Afraid Of?
We’re not going to lie. Taking a leap of faith and going independent can be a lot of work. But, as you can see, for every con there is a pro. So if you are holding back because you don’t know how to get started, are worried about failing, or don’t want to feel like you’re carrying a heavy burden, you’re in luck. We created Freedom Wealth Alliance just for you. We help financial advisors pursue independence by giving them all they need to succeed, including an investment management platform and process, state-of-the-art technology, and many ways to grow your business.
Just because you’re going independent doesn’t mean you have to do it alone. Learn more about our firm and its unique advantages by visiting www.explorefreedomwealthalliance.com. You can also email us at firstname.lastname@example.org 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 www.explorefreedomwealthalliance.com 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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