Top 8 To-Dos when Leaving a Wirehouse to Become Independent

Considering leaving your wirehouse to become independent? You’re not alone. In 2016, there were 64,000 independent and hybrid retail-focused RIAs at 18,000 firms.1 The most successful have one advantage in common — a well-researched, clearly articulated plan to break away.

Here are the top eight to-dos involved in becoming an independent RIA:

  1. Articulate Your Business Strategy
    Now is your chance to define your business and advisory model, mission, target market, core customer and investment philosophies.
  1. Determine Your Operational Model
    While many Advisors choose to make the full leap to independence, others elect to affiliate with a third-party independent broker-dealer, a hybrid model called “dual registration.” Firms like Sanctuary Wealth support dually-registered RIAs through Partnered IndependenceSM providing the resources for Advisors to grow their practices.
  1. Name Your Firm
    Since you are building a brand as well as a business, your firm name is key to defining your image, attracting new clients, and building visibility.
  1. Secure Legal and Compliance Resources
    Though your first task will be a review of your employment contract to formulate a clean exit plan, legal counsel is critical to structuring your new business entity, understanding SEC and state requirements and securities laws, and developing customer agreements and communications.
  1. Transition Your Accounts
    An estimated 86 percent of newly independent advisors reported that all or most of their clients chose to make the transition with them.2 Developing a conversion plan helps build client confidence and ensure a smooth transition.
  1. Set Up Your New Office and Technology
    Modern or traditional? Urban or office park? Which technology platform to use? The choices are many…and yours!
  1. Be Realistic About Funding
    Depending on your business model and location, start-up costs can range from $8,000 to more than $75,000.
  1.  Know Thyself
    Being independent is not for everyone. Only you can decide if you have the entrepreneurial spirit, drive, and fortitude to make the move.

Though there’s a lot to consider — and do — before going independent, experts can help you transition your business and position it for success. At Sanctuary Wealth, we offer comprehensive business management support, strategic marketing and branding expertise. We invite you to learn more by downloading our e-book, “Making the Move to Independence.”

1 Cerulli RIA Marketplace Quantitative Update 2017

2 Financial Advisor, Most Financial Advisors Happy With Move To Independent Model, Survey Says, February 1, 2012