Broker Check

Independent Financial Advisors: Where Opportunity and Experience Meet

| October 14, 2019

Now is a great time to be a financial advisor. It’s an even better time to be an independent one. The BUREAU OF LABOR STATISTICS expects demand for financial planning services from an aging population that’s living longer will drive a seven percent increase in the number of personal financial advisors in the ten year period ending in 2028. The seven percent growth rate is higher than the average for all occupations. With such an influx of new advisors on the horizon, it would stand to reason that experienced independent financial advisors will be in the best position to serve the dynamic needs of their clients.

Freedom and Flexibility Mean Added Value

Face it. Experienced financial advisors should know what’s best for their clients. But often the priorities of the firm they work for don’t align with the products and services the client really needs. Independent financial advisors do not face those pressures. They have the freedom to sell the investments that best meet client needs. At Cutter & Company, an independent Broker-dealer and Registered Investment advisor, financial advisors are not required to cross-sell bank products like loans or mortgages, or to meet arbitrary sales quotas in order to maintain a reasonable payout. You can hear in THIS VIDEO what freedom means to one experienced independent advisors.

Freedom is really a hallmark of independent advisors, who have virtually unlimited flexibility to build a business that aligns directly with their own goals. Look for independent firms that allow:

  • Freedom to set up the business model, marketing, client service, office location and technology systems in a way that makes the most sense for the independent advisor.
  • Freedom to decide whether to operate as a fee-based advisor, whether to charge commissions on transactions, or to use a combination of the two.
  • Flexibility to charge clients without penalties for discounted rates.

Many independent firms permit control over what happens to the independent advisor’s business in the long run. Consider that most experienced firms allow advisors:

  • Control over building their own “A Team” for their own company, rather than having people assigned to them as an employee of a firm.
  • Control over the size of client accounts they wish to serve without being required to turn small accounts over to call centers.
  • No restrictions on setting up a transition plan. Independent advisors can extract the full value of the business when they are ready to do so.

Most independent firms allow the independent advisor nearly total control over their business structure, growth objectives, and future succession plans. Perhaps the independent advisor would like to offer tax and legal services that complement the primary financial planning business. These kinds of outside activities can often be approved at an independent firm. Some firms will allow them without an additional charge to the advisor.

Service That Sets You Apart

Some financial advisors hesitate going independent because they think client service will suffer. But by working with an experienced independent firm you should expect your service level to be second-to-none. The majority of back office operations will take a lot of the work off the plate — like researching client issues and providing compliance support. Cutter & Company goes even further by opening new accounts and performing required oversight and supervision, so independent advisors can concentrate on working directly with clients.

Remember that those services and other office expenses aren’t free at the big firms. Financial advisors pay for them, usually through large overrides on their gross production. Independent financial advisors will almost certainly pay for these things directly but will have complete control over them to make sure they add value to the business.

No matter how independent advisors choose to work with clients they can get the expertise, technology and administrative resources needed for the business to succeed. They also reap the rewards of their experience. Advisors who are truly independent, typically receive higher payouts than they’ll find at many other firms. Experienced advisors should contact Cutter & Company for more information and to discuss any questions about realizing your true potential as you pursue FINANCIAL ADVISOR CAREERS in the independent channel. 

(Source cited: Bureau of Labor Statistics, United States Department of Labor)