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Six Things Advisors Should Know Before Branching Out on Their Own

For advisors who have spent the majority of the last two years working in a fully or partially remote capacity, many of the benefits of working for a wirehouse may no longer outweigh the expenses and lack of flexibility. While branching out and building your own business comes with many perks, it’s also no easy task. In fact, almost 90% of financial advisors fail within the first three years. Here’s what you’ll want to know before you decide to branch out on your own.

1. What Services You’ll Offer and Your Revenue Model

First and foremost, you need a viable business plan. For example, many advisors dislike the minimum asset requirements common throughout the industry, but if your compensation is an AUM based fee, you may struggle to earn enough without minimums. This doesn’t mean you can’t work with a wider range of clients, it just means you may need to think outside of the box. Maybe you decide to offer three or four different services with different fee structures, which could allow you to work with a wider variety of clients while still maintaining a viable business. 


One of the biggest benefits of branching out on your own is the flexibility that comes with it. If you have priorities that don’t align with the standard financial planning model, consider offering services or a revenue model that’s more aligned with your goals.

2. Focus on What Interests You

While there are plenty of valuable certifications and programs, if your only goal is adding letters to your name, you’re wasting your time. Instead, focus your education on an area that interests you. Most financial advisors have a niche that especially speaks to them. Yours may be anything from options trading to helping a client going through a divorce. If a designation is available within your area of interest, that’s great, but don’t limit your education to what’s covered by designations or certifications.


Especially when you’re starting out, throwing money at anything that may attract clients is hard to turn down, but at the end of the day, knowing your business inside and out will help more than an alphabet soup behind your name.

3. Who Your Target Client Is

It may sound counterintuitive but focusing your energy on a narrower client base is almost always better than casting a wide, generic net. 


Defining a target client doesn’t mean you’re limited to someone who exactly fits your target, but it can help you make decisions about your services, marketing, branding, etc. For example, if your target client is a millennial doctor or lawyer, a speaking event with retired baby boomers probably isn’t the best use of your time. 


You’ll want to consider your target clients’: 
 • Age 
 • Occupation 
 • Income level 
 • Life stage 
 • Financial needs and priorities

4. How to Maintain Strong Relationships with Existing Clients

Finding new clients is one of the hardest parts of life as an independent advisor. Especially when you feel the pressure building to bring in new clients, you may find yourself putting all your energy there, to the detriment of your current clients. 


Besides the fact that supporting your clients is part of the job of an advisor, and therefore the right thing to do, it’s also a good business strategy. The more satisfied your clients are, the more likely they are to recommend you to their friends or family members. Additionally, keeping an existing client is far cheaper than finding a new one. 


Whether the client is one you’ve worked with for years who followed you to your new practice, or a brand-new client, one of the best ways to keep clients satisfied is to communicate. Older clients may wonder how the change will impact them, while newer clients may not have previous experience working with an advisor. No matter the circumstance, communicate expectations with clients, making sure to be as specific as possible.


Topics to discuss include: 
 • How often will you meet? 
 • How can they reach you outside of face-to-face meetings? 
 • How quickly will you respond to clients? 
 • How will you and your client handle market corrections?

5. What Realistic Expectations Look Like

Starting a financial planning practice is not easy. That doesn’t mean it’s not worth it, but the more realistic your expectations are upfront, the more likely you are to succeed. 


First of all, it’s highly unlikely that all of your clients will follow you. People simply don’t enjoy change, and most major wirehouses make it easier for clients to stay than follow their current advisor. No matter how satisfied your clients seem, if you’re expecting all or even most of them to follow you, you’ll likely end up disappointed. 


There are also income expectations to consider. Almost every new advisor will need to dip into savings for a while. To make sure you have enough, crunch the numbers using your most conservative estimates. How much do you expect you’ll need to take from savings, at most? Now add at least 25% more. While you should hope for the best, when you’re running your own business, you have to prepare for the worst. At the very least, knowing you have plenty of additional cushion can help you sleep easier. 


Finally, you need to set realistic expectations on your time. The best way to do this is to focus your energies and figure out how to get the best return for time invested. A great way to do this is to track your time. While this itself may take a little extra time, knowing how and where you spend your time and how it is or is not converting clients is a great way to work more efficiently and effectively.

6. All the Hats You’ll Wear

When it comes to realistic expectations on time, you’ll also need to consider all the hats you’ll be wearing. Once you’re on your own it’s your responsibility to handle admin tasks, IT, marketing, and compliance. 

While you may be working on a limited budget in the beginning, you’ll also need to be honest with yourself on what you can and cannot handle on your own. Is it worth saving a few dollars at the risk of being out of compliance? Once you begin making a profit is that money better spent going into your pocket or towards hiring someone to help with admin tasks? The key to answering questions like these is to keep the big picture in mind.

The Takeaway

Branching out on your own comes with plenty of benefits, but it’s not easy. If you’re considering starting your own advisory practice, you’ll want to spend as much time as possible preparing beforehand to give yourself the best possible chance for success. 

One way to make life easier is with Presults automated email archiving, specifically designed to meet the compliance needs of Advisors.

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The Best Email Archiving Platform for Advisors

Here’s what you need to know to pick an archiving platform that’s the right fit for your firm:

1. Archiving Options

First and foremost, you need to ensure that any archiving platform you’re considering archives everything you need it to. While this may sound like an obvious requirement, even platforms made specifically for advisors may not include all necessary archiving. For example, some platforms may only archive emails. If the only way you communicate with clients is through email this isn’t a problem, but if you have a website or use social media, as most advisors do, only archiving emails will not meet your books and records requirements. 

If you use social media and wish to archive both emails and social media, you have two options. You could have one archiving platform for emails and one, such as Archive Social, exclusively for social media. Your other option is finding a platform that archives both. If you prefer to have two separate archiving solutions, there’s nothing wrong with that from a compliance perspective, though two platforms may require more resources, in the form of both time and money, as opposed to one platform that does it all. 

2. Proactive vs Reactive

Another factor to consider is how the platforms handle any potential compliance concerns. In this respect, platforms fall into one of two categories. The first type flags emails that contain certain keywords for compliance review. The second type uses a more proactive approach and actually stops potentially non-compliant emails from being sent. The latter option helps stop compliance concerns before they start, while the former requires the compliance team to reactively address the concern.

A proactive approach is obviously ideal, but few platforms currently offer this service. One of the few providers to do so is Presults.

Presults has a built-in compliance lexicon, which is constantly updated to ensure compliance with ever changing regulations. When a keyword is triggered in an email, the email is stopped from going out. This feature proves especially beneficial in protecting client’s personal information, since once an email with this information is sent out, a compliance review after the fact can only result in education to avoid a future issue.

3. Review Process

What your current communication review process looks like and the compliance resources you have at your disposal will also play a role in choosing the right archiving platform. Part of an advisor’s oversight responsibilities include reviewing communication with clients. In other words, if you’re archiving client communication but not doing anything with it, you’re not fully in compliance.

The problem is that email and social media review is time-consuming. For smaller firms with only one or two employees, each employee may wear many hats and struggle to find the time to get to compliance tasks such as email review. On the other hand, larger firms with one or more employees dedicated to compliance, may find their compliance staff have their plates full with other compliance tasks, and therefore also struggle to make time for the time-consuming review process.

If you’re looking for a more efficient system that saves time spent on compliance, AI-powered tools may be able to help by catching compliance concerns in real time.

4. Price and Flexibility

As with any purchase, price will likely factor into your decision. Most archiving platforms have monthly fees, typically based on the number of end users. The charge for end users may be a set rate per person, or for a range of users. For example, the price to archive three to five accounts may be the same but jump in price once the sixth account is added.

Archiving platforms may also charge additional fees. These include fees for storage, import or export fees, and set up fees. It’s worth looking out especially for export fees. These are fees you must pay if you choose to leave that provider and export your data. Since these fees are often per user, they can quickly add up. If you plan to stay with that provider forever, export fees won’t be a problem, but if you ever wish to leave for any reason, you may find yourself having to choose between paying a high fee or dealing with a platform that doesn’t work for you.

Beyond fees and monthly price, you’ll also want to consider the level of flexibility of any contract. With some platforms you’re locked in for a certain period of time, while other platforms, such as Presults, offer month-to-month contracts.

5. Customer Support

In a perfect world, customer support wouldn’t be necessary, but anyone who has ever worked with a computer, let alone a tech platform, knows how unlikely this is to be the case. Therefore, you’ll also want to look into what kind of customer support is offered by the provider.

Specific questions to ask a provider include:
• What does your onboarding support look like?
• What training do you offer to new customers?
• If I have questions, will I have the ability to speak directly to a person?
• Are questions on your website answered by a robot or a person?
• What methods of communication do you offer for customer support? Phone? Chat? Email?

Many of the larger and more well-known platforms are notorious for poor customer support. Frustratingly, these also tend to be the same platforms with contracts that lock you in for long periods of time and/or charge export fees that make it hard to leave.

The Takeaway

Email archiving may not be the highest priority on your to-do list but going with the first provider you find may lead to headaches, frustration, and wasted resources down the line. Now that you know what to look for and what options exist, consider what’s best for your advisory firm. Spending a little extra time to ensure an archiving platform truly meets your needs can make your life considerably easier down the road.