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Why Do Advisors Consider Independence? Part 1

There is no shortage of firms that will explain to advisors how they can go independent. But too often lost in the discussion is the why.

Why do advisors start to consider the independent path?

The answers to that question vary, but they tend to crystallize around a handful of reasons, and in our conversations with hundreds of advisors, we’ve seen some patterns emerge. But conversations and anecdotes are one thing; the results of a survey are another. So, our team at ASN recently polled a large cross-section of the advisor community, including advisors already working with ASN and a number who are not, to identify the top factors that spur advisors to explore independence. In this piece, we will focus on the top 5…

  1. The desire to start one’s own IA. Independence-minded advisors have a strong entrepreneurial spirit. They also tend to have a robust client-first mindset, and independence can better allow them to build a practice where their work is on behalf of their clients first and others second.
  2. A lack of support and “suboptimal” payouts. An advisor’s work is challenging and requires many behind-the-scenes support and services, ranging from IT to recordkeeping to marketing and much more. When that support feels lacking, advisors will start to investigate their options. And when a lack of support is coupled with opaque or constantly shifting compensation policies, the urge for independence becomes even more vital.
  3. The desire to build a brand and differentiated offering. The financial advisor world can look like a sea of sameness from a client’s perspective. We know that’s not the case, but it can be challenging to stand out unless an advisor can genuinely build their brand and play to their strengths.
  4. Costs are too high for the value received. In the same way, opaque compensation practices can be a driver for independence; rising service costs are also frequently cited as a key source of frustration.
  5. Lack of promised services or significant delays in delivery. Here the issues can very quickly extend to the client experience when specific services or solutions that have been promised do not materialize on time or in the promised form. Again, as noted above, for the client-centric advisor, anything that impacts the clients themselves can act as a strong push to change course and explore the independent route.


The points above are the first five of the 20 most cited reasons advisors shared with us concerning the “why” behind going independent. Our number 2 and number 5 points coincide with a recent poll conducted by Financial Advisor magazine, which examined satisfaction and dissatisfaction rates among RIAs that had recently completed a merger/acquisition. 70% of respondents in that survey indicated their motivation for the M&A was to grow their business, and among those dissatisfied with the deal, the top reason cited was “their new firm being unable to deliver the ‘support’ or resources they said they would.”  The Financial News article warned “It is easy to be enthralled by promises of big money and a plethora of business development and other support services. The advisors need to be highly confident that their expectations are met.” Obviously, dissatisfaction occurs when promises made are not kept, and as we have found, the result can often be a desire to explore independence because it offers much greater control over accessible resources and support services.

In our next piece, we will delve into a handful of additional points uncovered during our survey. We will also discuss what advisors can learn from their peers who have identified their why and moved on to the how and when, which are essential to managing this journey.