I want to give you my insightful industry lessons learned from my most recent trip to Old Navy. Yes, that’s right….Old Navy—the clothing store.
Those of us that have been independent for a while sort of instinctively know there's a nice economic advantage to being independent. However, if you're not there yet, I want to go through each category that you need to have a sense of, both in your current situation and in an independent model, and how to account for each one. You can then do a hypothetical profit and loss statement. How would it look if you had your own practice? It is hard to nail down the numbers (especially on the "what if you go independent?" side), but you can certainly get a pretty good estimate of what the numbers look like, and that will help you decide if it's worthwhile to you. I will touch on some of the reasons or situations where it might not make sense to go independent.
When I was talking to independent financial advisors before I made the move, I came across a strange phenomenon: they didn't seem to know what their net payout was!
One of my favorite inside jokes about a firm I used to work for is that they would tell us that "we pay you FIVE ways!" And it was (and I think, still is) true that there were multiple components of the total compensation....
That’s the million dollar question - sometimes more - over a lifetime.
Payout is a huge factor in our business, and a number we think we all know as an employee at a big firm. But when you're an independent financial advisor, there are a lot more moving parts and it can be complicated to calculate.