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5 Subtle Signs You Are Ready to Start Your Own Advisory Business

More than 90% of Financial Advisors who go independent express no regrets about their decision,1 but the transition can be scary – and many are still waiting for the “perfect moment” to leave. 

The truth is there will never be such a moment, and research shows that 36% of Advisors who transition ultimately wish they had made the move sooner.

Rather than waiting for the stars to align, Advisors should consider whether they can make a successful transition. Our experience at RFG Advisory helping 100s of Advisors build the business of their dreams has revealed five common signs that they are ready to take the leap – and this article reveals each of them.  

  1. Your Client Base Is Happy

Many Advisors fear they will be unable to retain their clients without the backing of their current firm. In fact, 48% of Advisors cite “client attrition” as a key reason not to start their own business.3 

But does this fear reflect the reality of independence? 

Studies reveal Advisors keep an average of 87% of their clients when they start a new business.4 Clients are loyal to the specific Advisor that engages with them and handles their accounts – not the name on the building.  

A happy client base is therefore a clear sign you are prepared to start your own business. Most satisfied clients will stick with you through a transition – forming the foundation of a strong business. The only challenge is ensuring the process is smooth and simple for them, which is why RFG offers specialized support to enable seamless client onboarding for your new business. 

  1. You feel held-back by technology

59% of Advisors believe technology is the primary driver of innovation in the industry.5 But many large broker-dealers are saddled with antiquated technology – and they spend their time putting band-aids and duct tape on legacy systems that don’t interoperate properly, rather than overhauling the infrastructure. 

As a result, Advisors at these firms are unable to access more innovative investment solutions, leverage digital marketing platforms, or deliver exceptional client experience. In fact, they are often charged for the privilege of using this outdated technology. 

If you are in this situation and recognize the problem, you are clearly forward-thinking enough to understand the real value of technology. This is a sign that you are being held back and could be even more successful on your own.  

RFG helps Independent Advisors unlock the full value of technology. From back-office automation to accessing innovative investment options, our fully integrated tech stack provides everything you need to put cutting-edge solutions at the heart of your new business. 

  1. You don’t have the capacity to grow 

Many Advisors’ feel their growth is heavily inhibited by their current firm. They have the reputation and skills to bring on new clients, but their home office is not providing the support staff required to scale. Adding more clients to their books will only create more work for the Advisor – and most simply don’t have enough time left in their week to fit it in. 

This is a sign you will actively benefit from the freedom and autonomy of running your own business. With additional resources and support, you will be able to grow your client base and increase AUM – but only if you choose the right partner firm that can deliver professional staff to support you and the newest methods of growing your business.  

  1. You are thinking about long-term net-worth

At a certain point in their careers, some Advisors begin asking themselves: 

  • How can I maximize my earning potential? 
  • How can I create a legacy to one day sell or pass down to my family? 
  • How can I retire earlier or into greater comfort? 

Advisors who ask these questions are clearly looking for a way to maximize their long-term net worth – and starting your own business is the best way of achieving that.  

The reason this indicates you are ready to start your own business is the mindset shift it implies. You are clearly thinking about how to grow in a sustainable way – and that is essential to building a successful business.  

  1. You have a vision for how a firm should be run

Some Advisors are happy to sit back and allow their owners to dictate how they work. They don’t mind that they lack control over: 

  • How they can market themselves 
  • What they can invest in 
  • How many people they can hire 

The firm is doing fine, so why would they deviate from the norm or challenge consensus? 

However, there are other Advisors who want to push back against these restrictions. They have a strong vision for the future – and it probably doesn’t involve 10+ hours of non-value generating administrative work every week.  

We know this because RFG has helped countless Advisors realize their vision.  

We have built the first fully supported independent model for Advisors, delivering: 

  • A fully integrated, modern technology stack 
  • Customized business consulting services 
  • Proactive and ongoing marketing and support engagements 

The result?  

Our Advisors achieve a 19% annual organic growth rate – 3x the industry average. 

Do you want to build something bigger than yourself? 

End Notes: 

  1. https://www.investopedia.com/news/why-more-advisors-are-going-independent-no-regrets/
  2. https://clearingcustody.fidelity.com/app/proxy/content?literatureURL=/9907413.PDF
  3. https://www.investmentnews.com/practice-management/news/advisors-prefer-independent-business-models-fidelity-finds-244608
  4. https://www.investopedia.com/news/why-more-advisors-are-going-independent-no-regrets/
  5. https://www.aboutschwab.com/schwab-independent-advisor-outlook-study-2021
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