I have spent quite a bit of time on the blog and podcast explaining why it might make sense to go independent--and I’ve spent a lot of my fourteen years in the industry either figuring that out for myself or talking to other advisors and articulating a case for doing so.
I think it is time to have a discussion about when you would NOT want to go independent. Obviously it’s not for everybody. If it was for everybody we wouldn’t need this blog. There wouldn’t be 60,000+ employee advisors concentrated in bank-owned firms. So, this is the second in a list of reasons why you definitely would not want to go independent.
The second reason is you should not go independent if you can’t do what you think is best for your clients. So, if you have the type of business that have particular products and services that only a large bank can service or provide, maybe going independent isn't right for you.
For instance, loan products or if you’re working with a firm that has an investment banking arm and you’re used to doing IPOs or syndicate business or any other proprietary type of investment that you can't transfer - or you can’t use in the future so if you have a proprietary investment that you were using on an ongoing basis that you think is the best fit for your clients, then obviously you shouldn’t move. You need to make sure that wherever you go has the capability to do what you think is right for your clients.
And I probably will talk enough about that aspect as just an assumption to me that we’re all trying to do what’s best for our clients and we’ve done our homework, had the professional competence to determine that and have the ethics and the fundamental morale to do so.
I probably don’t focus enough on that on this show but I want to make sure that’s an underlying assumption I make about any financial advisor particularly one that want to have their own practice and have more control and less interference in deciding what’s best for their clients. But there are cases where if you’ve built a business that’s based on business owners needing large amount of capital, maybe one of the large banks is a good fit.
That doesn't happen to be the case for me or most advisors that I know but I do know there are certainly cases where the stickiness and the relationship might be hard to undo and that might not be good for the client if they don't have access to their funds - whether that’s banking products or loans, syndicate IPO stuff, proprietary funds, a particular way of processing business for some reason.
There are too many things that fit this category. So again, number two is if you can’t do what you think is best for your clients, you should not go independent.