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The 31 Flavors of Independence

 

September 2017

Erik Mora

The 31 Flavors of Independence


Think about the last time you went to Baskin Robbins. For my kids, the process is the same every time. On the drive they tell me exactly what they want. For the record it is usually Rainbow Sherbet, but then we walk in the door and guess what?  The “31 Flavors” of options puts them into sensory overload. They no longer are confident about what they want. Their focus is not on what they want, but rather on not picking the wrong one. We spend time trying different flavors and debating about which they should get and shouldn’t get. Finally, I have to tell them if they don’t choose in thirty seconds we have to leave. I am convinced that without the time limit we would be there for a very long time.

I believe when advisors think about “going independent” they go through a similar process. They know what they want. The most common things I hear are more income, less bureaucracy, and to own their business. They begin the research and quickly discover “The 31 Flavors of Independence.” This is when things start to get complicated. Do you want to start your own firm? “Tuck-in” with an existing firm? Which custodian should you use? Are you going to be a “fee-only” advisor? Or a hybrid advisor? The list goes on and on. You get every custodian, broker-dealer, recruiter, and business development officer telling you why they have the best flavor for you. I completely get why this process is daunting. It makes me think of my kids at Baskin Robbins and what our experience would be like if they not only had 31 choices but someone standing next to each flavor telling them why Mint Chocolate Chip was better just plain Chocolate Chip.

 

Simple Tips To Minimize Paralysis by Analysis

While having options is a usually a good thing, the paralysis by analysis that is sometimes caused can stand in the way of getting to where you want to go. As advisors you see this all the time with clients and prospective clients wanting to understand the myriad of solutions and strategies available to them.  To offer some perspective we wanted to give you four simple tips on how to approach understanding your options.

Tip #1- Make a list. Write 3-5 items you must have in your future home and write why they are important. Be specific. This may sound simple or even silly, but from our experience as you start to understand the options you may get lost and forget why you started on this journey in the first place. I would make sure every item on this list is checked off or you have a good understanding why it can’t be achieved. With all the choices out there you can likely find or create exactly what you want.  This list will keep you from getting caught up in the paralysis of focusing on things that are not your top priorities. 

Tip #2- Understand the risks. Without a doubt you will hear the endless upside of being independent from every person courting you to make a move. We discussed some of them above. Who wouldn’t want more income, less bureaucracy, and more control of the direction their business? What about the risks of being independent? Most of the advisors we have helped make a move focus on “What if my clients don’t move with me?”  While this is the obvious and understandably biggest concern, I am talking more about the risk that exists after your transition. Going from a W2 advisor to business owner poses new risks that did not exist before. Whether you start your own firm or plug into an existing firm, my advice would be to spend most of your time understanding what potential pitfalls may come your way. Make sure the options you are considering meet your “list of must haves,” and then focus on what risks lie in those choices. This process will only make you feel more confident in your final decision.

Tip #3- Rely on trusted resources. I believe as human beings we are somewhat skeptics. Maybe that is how I think. For me, any major decision I make I try to leverage my existing network in search of resources I can trust to make the best decision. Whether you hire a new gardner or find a new doctor, I think most people look to their network of people to make the right choice. I believe you need to take the same approach. Your educational process will rely on understanding your options in search of the ones that meet your list of “must haves.” It will require you to have real conversations about risk. These are topics that you will need to be confident with the answers. Trusted resources give you a better chance of getting an education with less “spin” and more reliable facts.

Tip #4- Set a time limit. If you are considering independence give yourself a time limit to do your research and make a decision. A big part of paralysis by analysis is allowing yourself time to understand every option. This is why I shared tips 1-3 above. These tips allow you to focus your efforts on what matters most and by getting educated by resources you trust. A lengthy process is likely a distraction from your current business or time away from family and friends. Setting a time limit to your decision-making process will only benefit you. You will either arrive at a decision to stay where you are or you know where you need to be. Either way you win by not procrastinating with the process.

 

How We Can Help

Freedom Partners can help you understand the “Flavors of Independence.” We help you narrow down the choice so you can easily digest your options and get to a decision you can be confident with. We are not recruiters, nor do we get paid to steer you in a particular direction. As our tips suggest, we take a simple approach, discuss risks in detail, and help you build your reserve of trusted resources to assist you on the journey. 

 

About Freedom Partners

Freedom Partners' mission is to be the premier service provider for financial advisory firms in Southern California. Freedom Partners provides hands-on support and training that focuses on enhancing and refining the people, processes, and poetry of the partner advisory firms they serve. Their goal is to increase revenue, reduce costs, and help increase enterprise value. Freedom Partner’s A-Z back-office support is delivered by their team of professionals that have had long-standing careers in financial services.  Their experience has been in roles working closely with advisors, but also as top-tier sales representatives in client-facing sales roles. They have successfully helped build and run a RIA and have experienced the full life cycle of a firm.

Freedom Partners believes these experiences are their competitive advantage in the marketplace. Freedom Partners attributes their success to offering a transparent solution that incorporates technology but also delivers the in-office support they believe advisors want and need. FreedomPartners’ Co-Founders have successfully transitioned over $1 billion of assets from Wirehouse firms since 2014. To learn more about Freedom Partners, please visit us at www.FreedomForAdvisors.com or contact us at 949.751.7407