Becoming an Independent Financial Advisor

Could the independent financial services model be the key to unlocking the freedom, flexibility, and control you need to build your business and serve your clients your way?

Last Edited by: LPL Financial

Last Updated: February 03, 2025

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As a financial professional, you’ve built a career helping clients pursue their dreams and plan for their future. Now it’s your turn. Imagine having the freedom and flexibility to build your perfect business — serving your clients your way, determining the level of support you want, and keeping more of what you make. Will your current path lead you where you want to go, or could becoming an independent financial advisor unlock the future you envision?

Explore the Paths to Independence

An overwhelming majority of advisors, 71%, say they prefer the independent model, but only 44% are currently independent.*

What’s holding them back?

For some, it may be a misconception that independence is an all-or-nothing endeavor instead of a spectrum of flexible options. They’re asking questions like: Will I be on my own, or will I still have access to some back-office support? Will I have to manage the startup and ongoing daily operations of running my business? Will I be responsible for making all the decisions?

For others, it may be fear of the unknown as they consider: Will my clients come with me if I leave a big-name firm? Will I be able to generate enough revenue to thrive? Will the transition be too much of a hassle and too time-consuming?

The good news is, there are solutions to each of these questions, which we thoroughly discuss in our whitepaper, The Essential Guide to Independence.

Here, we debunk some of the common myths about the independent model.

Myth or Reality?

Myth 1: I will have to start from scratch.

Reality: Some firms offer a breakaway solution that combines the freedom and flexibility of entrepreneurship with hands-on business services and support.

“If only we had known sooner how functional things could be away from the wirehouse,” said Steve Arcos, chief operating officer and co-founder of Tower 68 Financial Advisors. “There was a lot of uncertainty around if we were going to be completely on our own, what happens if equipment breaks down or we run out of supplies, how is it going to get billed — all of that was uncertain. After a few months, we got a lot of things on autopilot and started moving into the business-as-usual part of things. It keeps getting better and easier to function.”

If you’re looking for an independent wealth management firm that provides a blend of freedom and support, consider adding these questions to your due diligence checklist:

  • Do you have a breakaway solution?
  • Would I own my client relationships?
  • What services and support are included?
  • What is the cost?

Myth 2: I won’t have a steady paycheck or the employee benefits I’m used to.

Reality: Some firms offer a W2 model, allowing you to focus on your clients and earn a guaranteed salary with access to employee benefits without having to manage the responsibilities that come with running a business.

“We get the feel of independence. We own our own business. But we have the support of everyone in the background making it happen. We’re independent advisors who have healthcare and a 401(k),” said Tracy Applewhite, Applewhite Tyll Retirement Planners.

If you want to continue operating as a branch employee but with better economics and more control over your business, consider adding these questions to your due diligence checklist:

  • Do you offer a W2 model?
  • Would I own my client relationships?
  • What would my payout be?
  • Would I be able to monetize my book in the future?
  • Would I have control over my brand, clientele, and product offerings?

Myth 3: Running a business will be too time-consuming and I won’t have enough time to focus on my clients.

Reality: Being independent doesn’t have to mean being on your own. Most wealth management firms offer varying degrees of support for the day-today tasks of running a business. Outsourcing these items to a trusted partner frees you up to engage clients and prospects and build lasting relationships.

“I think the perception that most advisors have is that when you become independent, you pick up all these new things you have to do to run your business. Although I didn’t have the same flexibility at the wirehouse I was at previously, I tried to ignore it largely because it was very easy to run my business and I didn’t want to go through the hassle of having to move my practice. But LPL’s Strategic Wealth platform makes it very simple. I don’t have all those things to worry about on a regular basis,” said Mike Ashworth, CFP®, Ashworth Financial Group.

If you want to free up your time to focus on your clients, consider adding these due diligence questions to your checklist:

  • What business consulting and outsourcing solutions do you offer?
  • What’s the price?
  • Do I qualify to take advantage of these services, or are they tied to production minimums?

Myth 4: I’ll lose the name recognition of a well-known firm.

Reality: Your clients are with you because of you, not your firm. This is your chance to offer a small-firm feel and control how you are represented in the market while leveraging the economies of scale of an industry leader to serve your clients.

“If you’re interested in owning your own practice and having strategic partners, what Strategic Wealth is doing is exceptional,” said Tony Frigoletto, Rivers Edge Wealth Partners. “You can have access to things you were afraid of leaving at the firm you were at, but you get what you want at the firm you’re going to.”

If you want to enjoy the freedom to offer what works best for your clients, consider adding these due diligence questions to your checklist:

  • How long has your firm been in business?
  • What’s your regulatory record?
  • Do you provide information about your firm to help me position this transition with my clients?

Myth 5: Transitioning to a new firm is too difficult.

Reality: Moving from one firm to another is a big commitment, but most advisors have very successful transitions and client loyalty remains high — especially with the right support.

“LPL’s transition team was nothing short of fantastic, literally fantastic. I mean, even beyond our wildest dreams. The transition was much more seamless than I thought it could be, and we’ve been more than happy,” said Paul Cohen, Marest Capital.

If you want to ensure a smooth transition while remaining empowered to take care of your existing clients, consider adding these due diligence questions to your checklist:

  • How long will it take to transition a firm of my size?
  • What type of training and hands-on support do you provide?
  • What percentage of my book will typically transfer?

The independent model has evolved significantly in recent years, and many wealth management firms have expanded their offerings to keep pace with advisors’ and investors’ needs and expectations. Make sure you align with a wealth management firm that’s continually evolving along with — and even ahead of — the curve to ensure you have the tools and support you need to thrive.

Find Your Path to Independence

Does a path to independence mean breaking away from the wirehouse environment but maintaining support like office space, benefits, and technology? Does it mean running your business with the full support of a team that’ll take care of the day-to-day for you? Or does it mean taking on 100% of the accountability, including compliance, risk management, and fiduciary responsibilities?

While the final decision of how you build your business as an independent financial advisor is up to you, take time with your due diligence and explore several affiliation models at multiple firms before you narrow down your choices. Remember to be thorough and thoughtful about how the broker-dealers, wealth management firms, or RIA custodians you’re considering will support your journey and business growth from day one.

Before you start talking with a firm, get to the heart of your why. The following questions can help you determine a clearer picture of what you want from a potential move to independence and lay out your priorities for an independent firm and business model.

  • Why are you considering a move? What will it mean for you?
  • What drew you to your current firm? What’s changed?
  • What does independence mean to you?

Your Options at LPL Financial

With LPL, there is no one-size-fits-all or one-size-fits-forever model. No matter what independence looks like for you, we have a solution to help you pursue your goals now and in the future.

  • Employee model: Linsco by LPL Financial is a modern W2 solution that embraces the spirit of independence without all the responsibilities that come from running a business.
  • Join an existing office: If you want to explore independence but aren’t ready to take on full business ownership, we can help you find an existing office or advisor network where you can pursue your goals.
  • Supported independence with business ownership: LPL Strategic Wealth Service enables you to gain control over your business, book, and clients, while we handle virtually all aspects of the launch of your business, from startup capital to office set-up, and help you run it moving forward.
  • Traditional independence: Our Corporate RIA model gives you unprecedented scale, plus the freedom to run your business and manage your clients with our full support, including an exceptional service team, compliance and risk management, technology, and practice management and growth resources.
  • RIA custody: Working with LPL gives you the greatest level of freedom and flexibility for you to run your business with complete independence, leveraging our custody platform with the additional benefit of accessing a wide range of services to help support your business and goals.

LPL’s Business Development consultants have a wealth of knowledge and experience, and they’re happy to answer your questions and offer guidance along your path to becoming an independent financial advisor. Reach out to learn more.


Disclosures

This material has been created and designed for licensed financial professionals only and may not include the level of detail, explanation and disclosure needed for a general audience to accurately evaluate the facts.

The views and opinions expressed by the LPL financial professional may not be representative of the views of other financial professionals and are not indicative of future performance or success.

Advisor firms mentioned and LPL Financial are separate entities.

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