The best advisors are seeking independence- Rob Mooney, Snowden Lane Partners
January is for planning. Setting your sights on tough goals and making plans to reach them. For many advisors, this time of year brings a fresh round of, “I wish I could go independent, but the timing just isn’t right.”
If that sounds familiar, we have great news: In 2018, we believe timing is ideal.
Several industry trends are working together to create a perfect storm of opportunity. From the decisions of major firms to investor attitudes to advancements in technology, the 2018 financial advice environment is setting you up for success. If you’re even thinking about transitioning to an independent practice, the question is no longer can you afford the risk of moving—it’s can you afford the risk of standing still?
Let’s take a look at what’s happening out there.
Since 2004, firms have entered into a voluntary agreement not to sue advisors for taking basic client information—names and contact information—when they depart. This helps reduce complications when advisors move among firms, and it keeps each firm attractive as an employer.
According to Financial Planning, this is a direct response to advisors like you choosing independence:
The fact that wirehouses are leaving the protocol is primarily due to growth of the breakaway movement, Mooney says. "It's a validation of the fact that the best advisors are seeking independence."
Firms are, in our opinion, punishing advisors for choosing not to play by their rules. Although it’s only a few of the major players now, it is unclear how many other firms will follow suit. How long will you be able to freely walk away and bring your relationships with you? Do you want to wait to find out?
Wirehouses will always be there, but your ability to leave them may not be.
According to a 2017 study by Cogent, investors are increasingly looking to advisors to handle their investment decisions:
Fueled by formerly-adviced 1st Wave Boomers and self-directed Silent Generation investors, affluent investors nearing or living in retirement are creating a surge in demand for financial advisors.
Not only that, but people are reporting greater trust in advisors, with 51% of advised investors reporting they have trust in the financial community—up substantially from 2015 – 2016. This may mean investors are more receptive to advice encompassing many facets of their financial lives.
You are now in a position to find new clients and create deep, fruitful relationships with them.
Automation is an ally.
You could hop on the “robo is the death of advice” bandwagon and fear automation like some of your peers, or you could embrace the exciting new frontiers automation can open for you.
Efficiency-boosting office management tools make it easier than ever to set up your practice and keep it running smoothly—everything from automatic birthday messages generated by your client relationship management system (CRM) to built-in compliance processes in portfolio management platforms.
Not only that, but used effectively, robo-advice platforms have the potential to be a valuable prospecting tool, or one that helps you service smaller accounts. Many advisors at LPL use our hybrid platform, Guided Wealth Portfolios (GWP), to reach younger clientele with lower investing thresholds, often building relationships with up-and-coming investors that may have otherwise gone overlooked.
You no longer need particular expertise to set up a business, prospect, or communicate with clients. The tools are ready and waiting. All you have to do is use them.
With an environment of growing opportunity in investor attitudes, the tools available to establish and run your business, and the urgency created by firms leaving Broker Protocol, we’re calling it: 2018 is the year of the independent advisor.
What more are you waiting for?
There is no assurance that the Guided Wealth Portfolios platform discussed is suitable for all investors or will yield positive outcomes. The purchase of certain securities will be required to effect some of the strategies. Investing involves risks including possible loss of principal.