For many advisors, independence is just a bridge too far—but greater autonomy and control are often closer than they realize.
“I want more freedom and control over my business, but I don’t want to be a business owner.”
“I want more independence, but I don’t want to sacrifice the support and community I’m accustomed to.”
“I would be happy if my firm just left me alone and allowed me to serve client’s needs.
These are common refrains from many of the employee advisors we speak with. They want to have a sense of ownership over how they run their practice—including the ability to hire and fire team members, distinguish themselves from their colleagues by marketing their business creatively, and be allowed to run their practice without as much interference from compliance.
Becoming an independent business owner may solve these challenges, leading many advisors to start their exploration process with that notion in mind. However, more often than not, advisors discover that going independent comes with a lot of work, from the initial setup to the ongoing management of the day-to-day minutia. Plus, they would be passing up on monetizing in the short term by eschewing a large transition package, in addition to the startup costs associated with setting up a business, leaving many advisors to conclude that independence is just a bridge too far.
It’s at this juncture that these folks often get trapped by inertia—stuck by the belief that there isn’t a better option between the status quo and independence.
The good news is that in a greatly evolved industry landscape, many advisors are finding that they can strike the right balance between the autonomy they seek and the scaffolding of a W-2 employee model.
In fact, in our most recent Transition Report for Advisors, we determined that wirehouses, regionals, and boutiques have all added a meaningful number of talent to their firms because each offered what advisors desired to achieve their goals with greater control. And the truth is there are stark differences between the cultures, business models, and levels of advisor empowerment at various firms. It all depends on what an advisor is looking to solve for and how a new firm’s value proposition rises to meet an advisor’s specific needs.
What does more control look like for an advisor at a wirehouse, regional, or boutique firm?
The Wirehouse Perspective
Let’s first look at the wirehouses and how they’ve evolved. While many think that moving from one wirehouse to another is more of a “lateral” move, there are still those who find the right level of independence within a large entity—especially with a big brand name behind them.
Take Vincent Finney, Ryan Bibler, and Joseph Panfil, for example: Former UBS advisors managing $800mm in AUM, who were looking to achieve greater freedom and control, and decided to move from UBS to Wells Fargo’s W-2 Private Client Group. As they shared with us in a podcast episode, even as employees at UBS they looked at their business as business owners. The team never felt that being an employee of a firm stopped them from running their business in the way they wanted to. That is, each of the three partners has equal equity in the business they created and their own “roles and responsibilities” with equal say in their vision for the future.
But things started to change at the firm. First, UBS left the Protocol for Broker Recruiting. This action signified the firm was taking more control away from the advisors and indicating that UBS owned their client relationships when in fact, the team built the practice based solely on their own hard work. And the team felt their vision was no longer congruent with the firm.
While the advisors initially considered independent options thinking this was the only way to achieve their goals, they ultimately discovered that Wells Fargo supported their vision for additional autonomy while retaining the scaffolding and work/life balance they coveted. Wells offered them the ability to have a unique brand on their website, a custom-built space, and demonstrated through the recruitment process that management could remove obstacles more easily than they experienced at UBS.
The Regional Firm Perspective
Regional firms such as Raymond James & Associates, RBC Wealth Management, Ameriprise Financial, and Stifel have evolved their platforms, technology, and human capital to meet the needs of sophisticated wirehouse teams. With their emphasis on culture and treating the advisor as a client, they’ve become a popular destination for those disenfranchised within the larger brokerages yet not interested in independence.
Consider “Jake,” a $300mm Merrill lifer, who loved his time at the wirehouse, but was getting frustrated by the bureaucracy of a large firm. He needed more administrative support, was pressured to cross-sell banking services, and was constantly blocked by compliance for routine tasks.
So when Jake started his exploration process, he thought the only solution was to go independent. To him, all employee firms were the same. He really liked the creativity available in the independent space and the day-to-day control he would have as a CEO. However, he had a lot of unvested deferred compensation and had never monetized his business before.
Jake landed on a “middle ground” option, choosing to go to RBC to monetize his life’s work and recoup some of his deferred compensation. Overall, RBC had a more entrepreneurial culture, offering an extra support team member and a simplified and consistent compensation plan that no longer emphasized banking. When he wanted to get something done for a client, management felt much more accessible within a flatter organizational structure.
The Boutique Firm Perspective
Lastly, there are boutique firms, a popular option for those looking to be employed by a firm with a bespoke brand and community of higher-producing advisors focused on the HNW segment.
“Michael,” a $700mm bank advisor, dreamt about owning his own business—and even selected an office location and secured his brand name. Although Michael enjoyed growing his practice at his firm, his clients started to ask for more—like tax preparation, in-house estate planning, and unique alternative investments. Yet he was unable to provide those services.
As he watched his colleagues leave the firm, Michael realized there had to be something that would allow him to better serve his clients.
He started by exploring a few of the popular “supported independent” platforms thinking these would be the only path to achieve his goals. In parallel, he decided to take one meeting with Rockefeller Capital Management. Surprisingly to Michael, Rockefeller checked off every box he was looking for in a new home while still having the comfort and familiarity of being an employee. The “boutique” culture of only hiring larger teams with a similar client base meant compliance would be much more flexible. Plus, true open architecture with 3rd party asset custody and enticing economics made it difficult to ignore.
Every advisor’s view of independence is different—and how each identifies what it means to be independent is specific to them. That is, having absolute agency and autonomy as a business owner or simply a few more degrees of freedom and flexibility as an employee.
And since the waterfall of possibilities has evolved, it is now much more likely that an advisor can find their version of “independence”—even in an employee firm.