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The Misconceptions of Independence- Volume 1

"Is My Client's Money Safe?"

May 2016

Erik Mora

“Is My Client’s Money Safe?”




When I first made the move from wholesaling to join an independent firm, this was the most common question I was asked. “Erik, if your job is to get advisors like me to move to an independent firm, how do you expect our clients to go from my current BIG firm to a “small firm account” they may never have heard of?” At first, I was confused as to what they meant by “account.” Then I realized they thought the client’s money was being held at the firm  (and that wasn’t as safe as their BIG firm’s accounts.) I quickly helped them understand clients’ accounts were not always held with the independent firm, but most RIA firms, choose large custodian’s like Charles Schwab or Fidelity. Most were shocked and slightly confused. My reply to them was “Do you think a Schwab account is as safe as your current firm’s account?”   

I think the safety of a client’s money is the biggest misconception of independence because of a lack of understanding on what it means to be independent. In the purest sense, an independent advisor has the choice of where they custody client assets. The custody options for your clients are endless, with some of the more popular being the large institutions and brand names that most clients know. (Schwab, Fidelity, TD Ameritrade, Pershing, etc.) The advisor also has the option to use more than one custodian. This gives the advisor the greatest flexibility to run their practice the way they want. The custodian works to get the advisor’s business because they understand the advisor has choices. This is important to understand because this puts the advisor in the best position, which ultimately puts the client in the best position for pricing, service and overall transparency.

I completely understand the initial thought process advisors have, as described above. The concern for many advisors is that their clients “know” their firm and if they go independent there may not be that “brand name” recognition. Sure, you will find plenty of smaller, less well-known institutions to custody client assets as an independent, but you also have the large ones I mentioned above. I agree that brand name matters, but the good new is, as an independent advisor you can provide your client some great brand names that will instill confidence and safety. 


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. Freedom Partners currently has over $900 million of assets under contract. To learn more about how Freedom Partners may be able to help you, please visit us at or contact us at 949.751.7407.