The time has come to make a decision. Do you want to be an employee or a business owner? The former comes with a certain level of security. The latter offers independence and a chance to build something on your own, which can ultimately lead to a highly valuable and sellable company.

This article is not meant to sway you in one direction or the other, but the benefits of independence abound in a scenario where one third of the workforce will be moving on in the next decade. If you’re wondering how to become an independent financial advisor, these are the steps you need to take.

Whether you’re changing broker-dealers, starting or joining an RIA, or looking for M&A opportunities, Bridgemark Strategies we can leverage our vast network and experience to help you discover and vet new firms so you can make the best choice for your needs. Contact Us

Step #1: Create a Business Plan

Try to keep this simple and straightforward. What problem are you looking to solve and how will you solve it? What do your clients need? What resources do you need? How do you see the future and what needs will you have in three or five years? Your business plan should begin with the answers to these questions. The rest will flow naturally from there.

What will be your costs? If you plan to borrow money to get started, the bank will want to see a full financial breakdown. Will you need startup money also known as transition money from a BD or other provider? Even if you’re completely self-funded, this is still a critical component of your business plan.

Costs need to be covered with sufficient earnings. Outline your business processes, marketing plan, and client retention and acquisition strategies. Start with simple bullet points and then do a deep dive into the details of how you think you can succeed.

Step #2: Define Your Growth Strategy

There are thousands of prospective clients out there who need help, and the numbers are growing every day. According to a 2020 report released by Cerulli Associates, an estimated 111,500 advisors are expected to retire in the next ten years.

That’s a third of the existing advisor workforce, leaving thousands of clients without professional financial advice if no one steps in. You can’t service them all and you shouldn’t try. Successful independent financial advisors have a specific strategy as to how to grow either organically or through acquisition. What will yours be?

Step #3: Set Up Compliance Resources

Do not try to handle compliance or legal on your own. Hiring a professional is strongly recommended. Our consultants at Bridgemark Strategies can help you make the right connections. We can also assist you in creating a business structure that will make it easier to sell your practice later on.

Rules and regulations change frequently in financial services. With a new administration coming on board in 2021 and a power shift at the congressional level, you can expect new regulations. A solid compliance and legal team can help you adapt as those changes happen.

Step #4: Invest in Technology

Financial technology has improved dramatically in the past decade. Reporting systems are more streamlined and user friendly. Online client portals have become a critical component to every advisor software stack. Start with these, add a CRM, and you have enough to get started.

As an independent financial advisor, you’ll have a variety of technology choices. Your custodian or BD may have a “preferred” technology list. Those tools are better for them because of vendor partnerships, but not necessarily good for you. Evaluate multiple systems before making your choices to increase your efficiency in this area.

Step #5: Offer All Services Virtually

If 2020 taught us anything, it’s that we can do business virtually. Financial advisors around the globe have adapted their business models to offer remote client service and video conferenced client meetings. Build all of that into your business model from the very start.

This isn’t a move of convenience. Virtual advisory firms operate without geographical boundaries, expanding their reach and allowing them to focus on narrower niche markets. If you’re becoming an independent financial advisor in 2021, you will want to be able to do all of your business virtually.

Your Partner Through Transition

At Bridgemark Strategies, we work with financial advisors and advisory teams to help you evaluate your next transition. Whether you’re changing broker-dealers, breaking away to start an RIA, or selling your business, we can help. No matter the transition you’re facing, you can count on our experienced financial advisor consultants to guide you through every step of the process with expertise, confidentiality, and exceptional service.

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