Breaking Away to an Independent Business Model: One Advisor’s Journey

Independent streak

For Rich Dragotta, founder and managing principal of INC Advisors in Paramus, New Jersey, his professional career unfolded for him — literally and figuratively — in his manager’s office in 2002. While discussing his future, his eye caught a magazine cover that featured LPL Financial. “It said something like, ‘LPL, Just Getting Bigger.’ Todd Robinson was on the cover, and I didn’t even know what or who LPL was. I took the magazine off his desk when I left and learned more.”

The article reported on LPL’s independent advisor model, which was new to Dragotta. “I didn’t even know what an independent model was. I was a poster boy for a wirehouse model,” Dragotta said. Or so he thought.

After researching and doing his due diligence, Dragotta joined LPL in 2003. “I was breaking away before the word ‘breakaway advisor’ even existed,” he said. And the move was not impulsive. In fact, Dragotta knew it would be a one-time move to a place where he could build a business with independence.

While Dragotta’s business plan was taking shape, he knew its operations would need to align with his personality and affinity for people. “The infrastructure started with a base of a solid value proposition. It was about community. It was about being around people. It was about offering my skill sets and talents in managing people and helping them manage their businesses. That is my passion.”

Unified independence

With his network of industry connections, Dragotta began to attract financial professionals of a similar mindset — with everyone sharing their ideas and experiences and building a large, independent practice. “It became unified independence; a network of independent consultants and advisors where everyone runs their own business, but incorporated under one umbrella,” he said.

Those who sought out Dragotta did so for a reason: a desire to be in control of their business. “Sure, the payouts are great, the services and products are great. But the underlying reason is they wanted to be in control of their professional lives,” he said. “If you’re just another number or employee, that’s not necessarily bad. It’s just not fun being under someone else’s agenda.”

Embracing change

Breaking away from a wirehouse and forging his own path had some risks — something that motivated Dragotta. “Change is unsettling, but if it’s in the right direction and you’re passionate about it, it’s really something you have to execute on,” he said. He acknowledged leaving a secure job can be tough. But, he pointed out, “then you have your freedom.”

In some respects, the decision for Dragotta came down to a binary choice: “The way I see it, you’re either growing or contracting. Complacency kills, in my opinion,” he said. When setting out on his own, he set concrete goals for himself — checkpoints of growth — to make sure he was focused on fulfilling his vision.

For its first decade, Dragotta said INC Advisors operated with a traditional, “purely transactional” business model, but slowly evolved into an advisory practice. “I think about what I was doing 18 years ago, and my value proposition isn’t close to where it is now.” While most advisors enjoy successful careers as asset managers, he sees the most change coming from wealth management services — something he said distinguishes his own practice. “It’s really holistic wealth management.”

Partnering for success

Dragotta credits a large part of his growth to LPL and its resources and support. “Their commitment in terms of technology — being at the forefront — is important,” he said. This helps him carve out operational efficiencies that make him a more effective advisor to his team and his clients.

Dragotta relies on LPL’s marketing services to help him raise awareness for his brand, while also helping him navigate various regulatory requirements. “Marketing has given us control of our messaging,” he added, and said many of LPL’s other business tools have been essential for his company’s growth.

"Just having all of the products and services out there and available — LPL has done a great job in allowing us to compete in this competitive marketplace."

Rich Dragotta, INC Advisors

Looking to the future, Dragotta’s focus remains the same as when he started with LPL Financial two decades ago, even if the industry around him has changed. “It’s still about advocacy. It’s about community. It’s about having a genuine interest in helping people run their businesses. It's not forgetting that I came here to be independent, to really work with advisors in a way where it's their business, they're in control. And really, I'm kind of the chief operating officer to what has now been over 100 businesses. It’s a great win for everyone.”

Featured in the video

Rich Dragotta
Founder and Managing Principal, ChFC®, CRPC®

• INC Advisors
• 20 years with LPL
• Business Model: Corporate RIA

Important Disclosures

The views and opinions expressed by the financial advisor(s) may not be representative of the views of other financial advisors and are not indicative of future performance or success. Neither LPL Financial nor the financial advisor(s) can be held responsible for any direct or incidental loss incurred by applying any of the information offered.

INC Advisors is a separate entity from LPL Financial.

Securities and advisory services offered through LPL Financial (LPL), a registered investment advisor and broker-dealer (Member FINRA/SIPC). Insurance products are offered through LPL or its licensed affiliates. To the extent you are receiving investment advice from a separately registered independent investment advisor that is not an LPL affiliate, please note LPL makes no representation with respect to such entity.

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