Independence brings advisors financial success: report

Share this article and your comments with peers on social media Three quarters of financial advisors who moved to an independent business model report that they are better off financially as a result, according to a new study released by Boston-based Fidelity Investments. The study is based on a survey of 173 advisors in the United States who chose an independent business model, such as an independent broker-dealer, or registered investment advisor, within the last five years. It finds that 76% say they are better off for the move; and, of those, 64% indicated they were better off within six months of their move. James Langton Finding out what makes advisors successful Related news New program puts spotlight on advisor innovation Keywords Practice management Advisors said their ‘biggest surprise’ regarding their moves was the number of clients who moved with them. Advisors reported that 39% of their clients were immediately supportive or pleased with their decision, another 43% were initially surprised but ultimately supportive, while only 18% were initially concerned but ultimately supportive. And, 86% of newly independent advisors said that all or most of their clients moved with them. The study found that nine out of 10 advisors report that they were happy with their decision to pursue independence, with nearly half (45%) indicating they knew immediately it was the right move. The top insight that advisors said they wished they had before transitioning was that they should have made the move sooner, followed by a feeling that independence is better. The report also says that half of advisors who moved did so without any strong influence from others, or a written plan. On average, they explored two to three different business models before making a move. Advisors did report some complications with the transition process, with 58% saying that it was somewhat or extremely difficult to re-paper their clients’ accounts. When asked for their suggestions to other advisors considering a move, in addition to suggesting that they ‘do research’ and ‘be organized’, advisors said: know what you want and make sure it’s a good fit; talk to others who have moved; and, do what’s best for clients. “Advisors of all sizes are defining independence on their terms, and reporting financial success as well as personal satisfaction,” said Michael Durbin, president, Fidelity Institutional Wealth Services. “What’s most critical in exploring independence is that advisors understand their options and choose the right fit — whether that’s starting an independent advisory firm, joining an independent broker-dealer or creating their own model.” “This study validates what we’ve been seeing in the marketplace. Advisors seeking independence are interested in the flexibility to design their practices, choose their products and define their brands. And, they’re open to exploring a variety of business models,” said Sanjiv Mirchandani, president, National Financial, Fidelity’s clearing and custody company. Negotiation tips when buying or selling a book Facebook LinkedIn Twitter

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