Many advisors appreciate the merits of independence including open architecture, the lack of proprietary products and the control they gain over pricing, account minimums and the client service model; yet many will remain in the employee world since they perceive roadblocks that can’t be solved for. Oftentimes this is a case of misperception. In order to set the record straight, here are several common myths about independence and the truth about each:

Myth: Making a move to independence would require too much heavy lifting.

Reality: Today there is a virtual cottage industry of consultants that handle everything from technology set up to legal entity establishment and ongoing compliance support. Firms like Envestnet and Callan deliver state of the art investment and reporting solutions to independent advisors and provide capabilities that rival what is found in the big firms. Pre and post launch, advisors will leverage the transition team either from their RIA custodian or independent broker dealer for hands on support and guidance. For advisors looking for more complete support, there are high quality service providers, such as Dynasty Financial Partners and HighTower Network that, for a fee, will build a customized, turnkey independent business for an advisor breaking out of the employee world.

Myth: Most advisors don’t have access to the capital needed to start a business.

Reality: Advisors can access the capital they need to launch an independent business from a variety of sources. Independent broker dealers will typically offer transition packages combining upfront cash and working capital loans, designed to provide the liquidity needed to cover startup costs. In the RIA space, the major custodians offer loans and soft dollar allocations. For advisors that are looking for an equity partner, firms like Focus Financial Partners or private investors will purchase a minority share in an advisor’s business thereby providing substantial cash flow to the breakaway advisor. Lastly, banks such as Live Oak Bank have recently begun providing specialized lending facilities to breakaway advisors.

Myth: The tools and resources in the independent space are inferior and insufficient for HNW clients.

Reality: Today, the independent space offers sophisticated advisors, serving HNW and UHNW clients, the true open architecture they need to shop the street for best in class investment options, at the best price. Whether it is bidding out specialized lending scenarios to multiple banks, shopping for top fixed income returns, accessing the best alternatives and private equity providers or tapping into wirehouse research, independent advisors have access to it all. Although this may take some leg work for a sole practitioner to piece together, if an advisor leverages the scale of a top independent network such as the ones that Dynasty, HighTower and Focus Financial have created, the connections are pre-established and easy to access.

Myth: Independence means sitting alone in an office.

Reality: Many advisors value the collegiality and idea sharing that comes from being part of a big office and feel that going independent and being alone are just not for them.   Fortunately there are many high quality, well established independent firms that have already created a scalable infrastructure and are looking to recruit in advisors. Although finding the right fit in terms of the economics, culture and investment approach may take some time, joining an established independent firm allows a breakaway advisor to achieve the benefits of independence, including a higher payout, less bureaucracy and greater open architecture along with camaraderie and support—without having to build something from scratch.

Although the road to independence is certainly not right for everyone, it is a very legitimate option for advisors and teams that are seeking greater control and ownership over their businesses. The obstacles that had once stopped advisors from making the leap to independence have largely been solved for, allowing those who truly have an entrepreneurial spirit to achieve their dream of business ownership.