How To Go Independent

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What kind of office should I get when I go independent?

Sean KernanComment

One of the biggest questions an independent financial advisor needs to answer is: what do I do for office space? There are a few different ways to go about it. If you are planning to go independent, my recommendations is that your goal should be to get "just enough" of an office from a size and quality standpoint. What that means will depend a lot on your stage of life and business.

On one end of the spectrum, I am going to assume you are not looking to work from home. If you're interested in that discussion, check back for another article on the topic soon.

On the flip side: if you have a multi-million dollar advisory practice, do whatever you feel fits best for your clients and your team---and invest in what you need or want. It may be possible to overspend, but once you get beyond a certain level of revenue, it is hard to make it truly a problem (unless you really really overdo the "build it and they will come" approach).

This article is probably most applicable for people like myself when I made the decision. When I struck out on my own in 2009, I had 3 major goals for my office space: that my clients found it to be professional and convenient, the fixed costs were reasonable, and that I maximized my flexibility to change my mind based on what unfolded during the transition to independence. 


The first goal--how clients received it--was critical. I had a fairly typical office for a wirehouse was in a very nice, mixed-use development in an affluent area, but my actual space was just a workstation and two client chairs. Nothing fancy---the brand of the firm (and the town/area to some degree) were probably far more impressive than the actual space. I had never found this to be a major impediment to building my business. The first three years of my business were spent in a fairly dingy strip mall---in a nice suburb, but still....and I was lucky enough to not let that image weigh me down. Prospective clients often came in and met with me and as far as I know, it never was a reason to not work with me. It was very convenient compared to going to the nearest wirehouse office even though I live in a fairly large metro area.

I kept this part simple. I wanted a location back in the town where I had that strip mall office and many of my clients lived. My wirehouse office was a couple suburbs over, but given that I was making a change, I wanted it to be as easy as possible for people to meet with me. I found another independent advisor who had some extra office space and was affiliated with the same independent broker-dealer that I was affiliating with---just by calling around and asking a few questions. His office was a one story professional office building owned a family practice doctor. It was just right. I believe if conveyed just the right mix of professionalism, simplicity, convenience, and utilitarianism. I don't think it won any clients over by itself (an office probably never will), but I am confident it didn't hurt the perception of my going independent with anyone that had worked with me for any length of time.

I think our longtime clients' perception of our office (and other superficial signals like clothing, cars, jewelry, etc) can be analogous to a relationship a your spouse if you've been married for a long time. Obviously, when we first meet and fall in love, we have a very heightened sense of someone's appearance and we want to look our best when we see forward 10 or 20 or 50 years, and you probably have a different relationship. One of the great benefits of a strong relationship is that you don't have to look or act your best to maintain the respect of your partner. We should never take our clients (or our spouses!) for granted, but the point is that you can sometimes missed that your clients have become committed to you and aren't worried about if you have your best suit on or did your hair that day--or new office space is like.

I have focused on transitioning your existing clients because that's often what holds people back from going independent. However, you will certainly want to think about how NEW prospects and clients will perceive the office if you plan to be there a long time and if growth is a big part of your future plans.


Renting for another independent advisor made this a simple issue to deal with. He had a back office that was essentially going unused and I offered to pay him some rent---win/win/win (for him, me, and my clients). Since he had been paying for the whole space himself for more than a year, the rent I started paying was marginal income for almost no work or difference to his business/life. In general, you will get better terms with a longer agreement, but my "landlord" and I started and maintained an indefinite month-to-month agreement. This small example of two independent advisors exemplifies the creativity inherent in being independent: the arrangement came to fruition on its own, with no big firm or branch manager needing to be involved. Simple, effective, profitable, beautiful. 


So about a month before my schedule transition day, I subleased this 130 square foot space from my fellow independent advisor. We had an understanding that I would see how my transition went before committing beyond a few months. In fact, we never even wrote up a lease, even though (SPOILER ALERT) I ended up staying there for 7 years! I strongly suspected my transition would go well from a revenue standpoint. However, I did NOT want to have a long-term fixed expense commitment; as a new business owner, I wanted to be smart about how I managed risk. There are more and more options out there for a turnkey solution if you can't find a fit like I did and want the simplest approach. I recommend just searching "executive suites" and your town/area or take a look at the global giant in that field, Regus. They definitely make it easy to setup shop.

You may have the spot in mind that you want to be for the rest of your career. That's great! I still recommend you think hard about what happens if things change---because things often change. Moving is a pain. I don't like moving. I really don't like moving. However, just knowing I had the freedom to make a change always made me feel more in control of my life. I ended up using that space for 7 years but I am very glad I wasn't locked in to at the beginning.

So, those were my goals for office space when I became an independent financial advisor. Your criteria may be different, but think it through. As always, let me know if I can be of help.