Many advisors have dreamt of building their own business without compromise. But when put in practice, the cost-benefit analysis of transitioning is weighted heavily in favor of staying put with their restrictive firm. But what if this is not a reflection of the facts – and instead shows that many aspects of independence are routinely overlooked?
While most advisors have thought about building their own practice, the reality of independence is often obscured by fear of transitioning. This article helps explain why the overwhelming majority of these advisors are content, and what you are losing out on by staying put.
Expect to learn:
✅ The average AUM growth advisors experience after going independent
✅ How much more advisors earn after leaving their firm
✅ Why building your own practice is the best and fastest route to financial freedom
Four Underappreciated Benefits of Full Equity Ownership
1. Faster growth
Many advisors assume that staying at their existing firm offers the best growth trajectory. With an established brand and pre-existing infrastructure behind them, most assume that whatever they can achieve where they are is the best scenario they can get. But the research suggests otherwise.
A study by Fidelity found that advisors who transition increase their AUM by an average of 42%. But this is not the only benefit these advisors experience. The transition also enables them to explore new business models, expand the scope of their offering and build a brand they are proud of.
The expert team at RFG enhances all these benefits by taking non-revenue-producing tasks off your plate. We help you choose the right tech, establish strong practice management protocols and even market the business for you – so you can focus on growing. As a result, advisors who have chosen to join RFG have experienced 3x faster growth than the industry average.
2. Increased control
Advisors fear they will lose control or be overwhelmed by daily operations when they transition. This is reflected in Fidelity’s research: 50% of advisors say they worry about not having enough time to serve their clients after a transition, while 27% cite “dealing with compliance and regulation” as a primary concern. But these fears are largely based on the assumption
With RFG’s support, you actually gain more control over how you spend your time. We take care of daily operational management so that you can choose how to best use your time. You can develop your own business model, manage clients exactly how you want, and create a new, better way of doing things.
The key here is choice: You can forge your own path. Many advisors find that their priorities change over time, which is why having as much control over how you spend your time – and where you focus your professional energy – is so crucial.
3. Higher earnings
A survey by Fidelity cites the financial benefits of independence as an important influence on their decision to transition. Almost half (48%) of all advisors surveyed expressed a fear that clients would not follow them to a new firm. This means many advisors fear that the cost of independence would be a reduction in salary.
However, research finds that advisors who leave their firm earn $100,000 more each year. And the reality is higher AUM and annual earnings are just the tip of the financial iceberg when it comes to building your own practice. With increased equity comes the possibility to sell your firm, which is a game changer for long-term net worth – especially given that the average valuation of firms has risen 20% in recent years.(6)
Better still, with RFG’s model, you can access flexible financing and support across the entire transition period. The result? Your clients are more likely to follow you, set-up costs are reduced, and the overall financial benefits are considerably increased.
4. Long-term security
The fear of losing control isn’t just about short-term priorities: it’s also about long-term financial security. Many advisors believe that they must stick with their existing firm because it insulates them against the market volatility and will eventually grant them financial freedom.
However, the key to financial security isn’t a secure job – it’s building something of your own. Being with an established employer does not mean your job is safe for life. The job market is highly volatile, and many businesses will continue to shed employees in the coming years – whereas building your own practice without compromise puts you in control.
Ultimately, given the combined force of increased annual earnings, faster AUM growth and actually owning your firm, starting your own business is by far the best way to maximize your long-term net worth.
Unlock These Benefits and More with RFG Advisory
Considering these benefits, do the scales still tip in favor of staying at your existing firm? At RFG, we believe that most advisors can achieve far more by building their own practice without compromise-and our empowered independence model exists to make that easier.
With our technology, expert marketing support and community of growth-orientated advisors, RFG helps advisors take control of their professional lives, realize their full earning potential and gain financial freedom faster.
Want to explore how it could help you build your ideal practice?