Six years ago today, I established my own independent financial advisory practice. It was the culmination of seven years of building a client base at big firms, learning about various business models, and planning for the move. It was probably inevitable that I would end up with my own practice once I learned that the independent model existed.
I am very grateful for the autonomy to run my business the best way I see fit for my clients and my family. For me, "Going Independent" has easily been the best professional decision I have ever made.
When I started in this industry in 2002, I only knew that I loved personal finance and investments and the idea of building my own client base. The firm I started with provided each financial advisor--or "Investment Representative" as they called us (since they didn't have us take the Series 65 or 66)--our own office and full-time assistant.
I chose the model largely because I figured working in my own office would fit me well. I followed the firm's marketing recipe, which included knocking on residential doors to introduce myself to people near my office. It was hard and not always comfortable, but it worked enough to help me build a good base of potential clients. One unintended benefit of that process was meeting fellow advisors who lived in town.
One particular independent advisor was a fellow service academy graduate who had started in the industry with the firm I was working for. He invited me in and we talked for awhile, which was a welcome break from going on to knock on the next door.
He passed my name on to his independent firm's recruiter and I met with him a few months later. I was not in a position to really do anything practical with the information, but I was enthralled by the concept. I started creating spreadsheets related to this new world I had "discovered" and often daydreamed about a time when I could "graduate" to owning my own practice.
It was a big incentive to know that if I grew my business to keep my employer happy, I was also creating relationships that could be the basis of my own practice someday.
Over the next two to three years, I was fairly successful in building a viable business. I earned two incentive trips, helping a few new advisors in the company's mentorship/training program, and built up my production to about $189,000 (my trailing 12 month gross at the end of my third full year of production in mid-2005).
I had also continued to learn about various other companies and taken the time to talk or meet with several of their branch managers. Nothing ever jumped out at me as worth leaving where I was. However, I eventually started to feel limited by the lack of access to any advisory platform at my firm.
I was a voracious reader of industry related publications and came across an article about transition/bonus packages for newer advisors. It turned out that some wirehouses were trying to attract less experienced people who had demonstrated their ability to produce.
They figured this would be a potential alternative to training from scratch, which was historically very expensive with a low success rate. I reached out to the author of the article, who ran a headhunting/recruiting firm. She confirmed that I was indeed a candidate for such an offer.
At the first meeting with the wirehouse, their representative was a fellow West Point grad -- I thought, "this has to be a setup," but it turned out that was in fact part of this guy's role at the firm. After a few months of planning, I moved to the firm on July 22, 2005. I received a transition package equal to 100% of my prior twelve months' production. It was fun depositing that check, less than a month after my 30th birthday.
The move was relatively smooth and I was back to about 80% of my prior AUM within about nine months. For those first two years, I was focused primarily on moving my clients and learning the new systems. However, my mid-2007 things had calmed down and my attention was drawn to the independent model again.
I kept in touch with the independent firm recruiter I had met four years earlier. He connected me with other advisors who had made the switch and I met or talk with many of them. Each discussion got me more excited about the prospects of one day having my own practice.
As the financial crisis of late 2008 and early 2009 unfolded, my wirehouse firm merged with another---which I knew meant we would be moving to the other firm's nicer office space nearby. I knew by then, I wanted to be the one who decided when and where I moved my office.
I accelerated my discussions with an experienced assistant who had the capacity and bandwidth to help me move. We spent several months off-and-on discussion our plan so that I could really think through each element of the change. I had already had the transition experience once, so I was less nervous and very excited to pull the trigger.
When the day came, it was glorious. On Thursday, September 3, 2009, I Went Independent.