Few career moves in wealth management generate as much excitement, or as much deliberation, as going independent. Yet advisers keep making the leap, and the data suggests most are glad they did.
The shift isn’t a passing trend. Over the past decade, the number of advisers working at independent RIA firms grew at a compound annual rate of 5.2%, according to Cerulli , while other channels stayed flat or shrank.
Freedom is the draw, but it isn’t free
When we asked advisers in Betterment’s 2024 Advisor Survey why they went independent, 59% pointed to business freedom as their top reason, ahead of personal freedom (51%), access to better technology (44%) and earning potential (43%).
That tracks with what we hear every day. Advisers want to run their practice their way and choose the tools and investments that fit their clients best.
But freedom comes with a new set of responsibilities. On top of giving advice, a breakaway adviser now has to build a brand from scratch, stand up compliance, pick a tech stack and manage every piece of business operations without the infrastructure a larger firm provides.
The first year won’t be easy, and many decisions made in the early months will shape the business for years to come.
The good news is that most of the missteps that slow new firms down are avoidable. Here are three we see most often, and how to sidestep them.
About Adviser Intel
The author of this article is a participant in Kiplinger’s Adviser Intel program, a curated network of trusted financial professionals who share expert insights on wealth building and preservation. Contributors, including fiduciary financial planners, wealth managers, CEOs and attorneys, provide actionable advice about retirement planning, estate planning, tax strategies and more. Experts are invited to contribute and do not pay to be included, so you can trust their advice is honest and valuable.
1. Skipping the legal review
In the rush to get started, it can be tempting to focus on your new firm before fully understanding your obligations to the firm you are leaving. Questions about client information, outreach and employment restrictions deserve attention before you set a resignation date.
What to do instead: Hire an attorney to review your employment agreement , noncompete and non-solicit terms, and broker protocol status before you resign. Keep your resignation letter short and professional, and don’t tell clients your plans until after you’ve officially resigned.
A compliance consultant can also be worth the investment here, since one small misstep can delay a launch by months and/or result in fines.
2. Underpreparing for client conversations
While reasons for going independent may be clear to you, your clients need to understand what the decision means for them and their money. Advisers often overestimate how hard it will be to bring clients along to their independent practice, and that anxiety can lead to one of two mistakes: Winging the conversation or over-engineering it.
What to do instead: Plan your announcement around what independence means for clients, whether that’s better service, stronger technology, transparent fees or a fiduciary commitment .
Anticipate the questions you’ll get:
Why are you leaving?
How will my accounts transfer?
Will my investments change?
How long will it take?
Have clear, confident answers ready, and choose the format that fits each relationship, from an email to a phone call or a face-to-face meeting. Then trust the relationships you’ve built. Your clients chose you once, and most will choose you again.
3. Trying to manage everything yourself
Launching a new firm involves many moving parts: Selecting technology, establishing workflows, preparing paperwork, coordinating transfers and keeping clients informed. That’s a recipe for burnout and a fragmented tech stack, which, according to InvestmentNews , more than half of advisers already cite as their biggest technology pain point.
What to do instead: Treat your custodian as a partner, not just a place to hold assets. The right custodial relationship can provide a dedicated transition team, communication templates, digital onboarding, automated account transfers and real-time tracking of where each client stands.
When evaluating options, ask direct questions:
Who will support my transition?
How long will it take?
What help is available after launch, and is any of it restricted to larger firms?
The degree of human and technology support you can receive will make a significant difference in how heavy that first year feels.
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Build the right team around you
A common thread runs through all three potential pitfalls: Going independent doesn’t mean going it alone. Legal counsel, tax advisers, compliance experts, peers who have made the move before you and a custodian invested in your success can all take real weight off your plate. That frees you to focus on what you set out to do in the first place, which is serving clients better.
Independence offers the chance to build the business you’ve always envisioned, serve clients without conflicts and create lasting value. With the right preparation and the right people by your side, the challenges of year one can become the foundation for all the success that follows.
There’s no sugarcoating it: Launching your own firm takes grit, planning and a tolerance for a demanding first year. But the advisers who’ve done it overwhelmingly say they would do it again.
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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA .
