April 24, 2024

Becoming an independent financial planner has been on the minds of many registered investment advisors (RIA), and for good reason. With increasing mergers and acquisitions happening in the industry, advisors are seizing the opportunity to form their own independent advisory firm. Going solo offers more autonomy, control over investment strategy, and potential for greater financial gains.

However, while making the switch can be exciting, the attributes that make a successful advisor in a bigger organization don’t always translate into the skillsets needed in running an independent business. It’s essential to keep this in mind when contemplating making a move. Nonetheless, with careful planning, making the jump can be an excellent career decision that graces you and your clients with lifelong financial rewards.

Step 1: Obtain Licensing Requirements

The journey to becoming a successful independent financial planner requires obtaining the right licenses and complying with governing bodies. Licenses such as the Series 7, issued by the Financial Industry Regulatory Authority (FINRA), are crucial for selling securities and related financial products. Additional licenses like the Series 63 and Series 66 may also be required depending on the state you operate in.

Acquiring a state-specific insurance license is mandatory for selling insurance-related products. Keep in mind that specialized licenses may be necessary to sell other types of financial products. Once licenses are obtained, ongoing compliance with FINRA, the Securities and Exchange Commission (SEC), and state regulatory bodies is necessary. Virtual Assistant for Financial Advisors must follow ethical and compliance standards when interacting with clients. Staying up-to-date with changes and advancements in the industry is also required through continuing education courses.

To avoid the complexities of licensing requirements and compliance, it may be wise to enlist a dedicated manager to handle these responsibilities.

Step 2: Market Your Independent Financial Planner Practice

As independent financial planners, it’s crucial to establish your brand and effectively market your services to build and retain a loyal client base. Start by defining your niche and tailoring your marketing approach to clients seeking your specific financial products and services. With a solid business plan in place, set achievable goals and outline financial projections to help meet and exceed key metrics, such as client growth.

A strong online presence is also essential, as clients increasingly turn to digital channels to consume financial products and services. Optimize your website to make it easy for clients to access information and get in touch with your team. To position yourself as a trusted expert, consider leveraging thought leadership opportunities such as hosting a podcast or participating in guest speaking engagements.

To expand your reach and attract new clients, tap into your existing network and ask satisfied clients for referral business. Meanwhile, cultivate relationships with other industry experts to leverage partnerships and shared expertise. Finally, consider setting competitive fees that clearly communicate your value proposition to clients, possibly even offering premium services to further differentiate your practice from competitors.

Step 3: Build and Nurture Relationships

The critical nature of retaining clients in an advisory role cannot be understated. A planner seeking to transition away from their firm ought to meticulously evaluate their client relationships, ensuring full satisfaction on the clients’ side and that the relationship is robust.

Client satisfaction hinges on a personal understanding of their individual needs and future goals. Advisors can reinforce such bonds through frequent client communication, improving their bottom line in the process.

Months prior to their exit, advisors should aim to strengthen client relationships, increasing the likelihood of retaining loyal clients when starting new ventures. In fact, industry insiders suggest that one of the key components of an advisor’s success when going out on their own is the precursory maintenance of pre-established client relationships – arising from a preferred alternative to starting from square one.

Step 4: Retaining Existing Clients

The world of financial advisory services can exhibit certain protocols between brokers and Registered Investment Advisors (RIA). In these cases, the signatory institutions may refrain from taking legal measures against an advisor who takes basic client data with them during a transition from one institution to another. Some advisory firms even allow their advisors to inform their current clients about their departure and new location, providing clients with information crucial to deciding the course of action in their best interests.

However, the advisor’s journey to freedom is not always straightforward. These advisors can also face non-compete or non-solicitation agreements upon joining a new firm – creating challenges for those wanting to start independent ventures. Advisors must be mindful of these agreements and avoid behavior that could infringe upon contractual agreements.

Nonetheless, advisors can still cultivate relationships with their clients beyond a firm’s limits. Private and personalized contact information, such as emails or phone numbers, can be exchanged, allowing clients to maintain a connection and continue their relationships with their trusted advisors. In such cases, advisors may only take their client’s basic contact information, creating the need for reaching out to clients individually; clients can choose to provide their account information at their discretion.

Step 5: Select a Custodian

When launching an independent financial advisory business, selecting a secure custodian to keep your clients’ assets safe is critical. Choosing the right custodian requires careful thought and consideration. Start by querying their protection measures against fraud, cybercrime and data breaches. Equally important is to select a custodian that specializes in the type of assets your clients will be investing in. Depending on the type of assets, a proven track record of success with that asset class is a key deciding factor.

In addition to custodial expertise, excellent customer support is paramount. You and your clients should expect quality assistance that quickly resolves any issues. For clients outside the United States, 24-hour support is a must-have. And finally, advanced technology is a game-changer. Access to cutting-edge digital tools and online platforms such as investment apps can streamline the investment administration process and help your clients manage their assets much more efficiently.

When to Consider an Independent Firm

The professional financial industry offers numerous pathways for success and growth for advisors. If starting a new venture may seem daunting or unfeasible, advisors can opt to join an established independent advisory firm or broker-dealer (B-D) that offers investment services.

Miss out on the back office, compliance costs, start-up, overheads and other administrative costs that burden new firms. Instead, advisors can fully focus on building new client relationships and nurturing existing ones from the get-go with all the necessary infrastructure and support readily available to them.

A highly experienced and skilled advisor will never go unnoticed in a small independent firm. These firms would appreciate such advisors since these hires can eliminate their need to go through the rigors of recruiting new talent.


Ultimately, it is upon each individual advisor to decide what suits them best. Decide between working for an established firm with existing infrastructural support or have the freedom to create your own investment style under your venture.