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Day in the Life of a Financial Professional: As a
CERTIFIED FINANCIAL PLANNER™, Dominique leverages over 20 years in the financial services industry to help aspiring and existing financial professionals serve their clients at the next level.
How to Do More with Your Life and Money: Having spent the last several years running a successful registered investment advisory firm, Dominique provides timeless financial strategy for those wanting to make the most of their time and money.
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Financial Advisors: Time to Start Your Own Firm?
In today's shifting financial landscape, breaking away from a broker-dealer and establishing your own RIA firm might be the career boost you need.
Introduction
Ready for a game-changing shift in your financial career? Challenge the standard and consider stepping away from broker-dealers to establish your own RIA. This article explores the advantages of independence over working within a broker-dealer framework. Imagine increasing your payout, offering personalized service, and having the autonomy to make your own decisions. Embrace the freedom and potential of running your own firm. Now's the time to challenge the norm and explore the benefits of starting your own RIA. Get set to redefine your growth and step into the world of financial independence today.
Is Working at a Broker-Dealer Really Worth it? [0:12]
The journey of a financial advisor often starts under the umbrella of a well-established broker-dealer. But is it really the pinnacle of professional growth? Or are there untapped horizons waiting for you? While broker-dealers may offer an extensive network and a steady flow of clients, they may also restrict your earnings and control your client relationships. (CLICK HERE FOR YOUTUBE VIDEO AT THIS TIMESTAMP)
The Changing Landscape of Financial Services
In today's rapidly shifting financial environment, professionals must reconsider their ties to broker-dealers. With alternative solutions becoming more prevalent and advantageous, the old 'status quo' may no longer be the best path forward. The financial services landscape is no longer a one-size-fits-all environment. With digital technology driving innovation, customization is key. Clients seek personalized advice and solutions. Independent Registered Investment Advisors (RIAs) are more equipped to meet this demand compared to traditional broker-dealers, as they have the flexibility to tailor their services. (CLICK HERE FOR YOUTUBE VIDEO AT THIS TIMESTAMP)
Starting Your Own Firm or RIA
When stepping out of the traditional broker-dealer model, financial professionals have the opportunity to "start their own firm" or "start their own RIA". This shift allows for increased net payout and a higher level of personalized service to clients.
Breaking away from a broker-dealer and starting your own firm or RIA can be a rewarding move. It provides the freedom to define your business model, increase your net payout, and offer bespoke services to clients. However, like any venture, it requires planning, compliance, and setting up the right operational workflows. (CLICK HERE FOR YOUTUBE VIDEO AT THIS TIMESTAMP)
Check out these YouTube videos where I detail the process a bit more.
Move #1 - Plan Your Transition
Transitioning from a broker-dealer to an RIA isn't an overnight process. It's crucial to create a business plan outlining your service offerings, target audience, and marketing strategies.
But it goes deeper than that. You need to plan your revenue forecasts, capital requirements, and keep up with other key metrics that will help your business grow.
You’re not just a financial professional, you’re also a business owner!
Understanding potential risks and how to mitigate them is also an integral part of your plan. Don't overlook any detail, big or small - each could have a significant impact on your success.
Remember, you're not just transitioning your job role - you're building a business from the ground up. (CLICK HERE FOR YOUTUBE VIDEO AT THIS TIMESTAMP)
Move #2 - Plan Your Model
Next, decide on the right business model. Do you want to work on a fee-only basis, or would a commission-based or hybrid approach suit you better? Remember, the aim is to align the business model with the financial goals of your target clients.
Each has its pros and cons. For instance, a fee-only model might work for you if you aren’t interested in offering insurance or annuity products. guarantees a steady income but might limit your client base.
On the other hand, commission-based models open a wider market but are subject to safely navigating conflicts of interest with regulators and most importantly your clients.
Hybrid models blend the advantages of both. It's essential to weigh these options carefully, considering your prospective clients, business goals, and personal preference.
Just remember that the business model you choose can be a game-changer for your future RIA. (CLICK HERE FOR YOUTUBE VIDEO AT THIS TIMESTAMP)
Move #3 - Prepare For Registration [5:37]
Securing compliance is a critical step when transitioning from a broker-dealer to an RIA. Whether you register with the SEC or your state regulator depends on your client assets under management and other factors. The registration process can be complex, requiring comprehensive documentation and adhering to strict guidelines.
Don't rush this step - ensuring you meet all regulatory requirements can save you significant stress and potential legal issues in the future. The initial effort is well worth the peace of mind and operational freedom it delivers. (CLICK HERE FOR YOUTUBE VIDEO AT THIS TIMESTAMP)
Move #4 - Prepare Your Workflows [6:44]
Before you welcome your first client, take a good look at your operational structure. What kind of technology will best serve your needs?
What client management system aligns with your service model?
And what kind of support staff will you need?
Operations are the backbone of any business. Efficient processes enhance client satisfaction, maintain regulatory compliance, and boost your overall productivity. You might need to invest in modern financial software like RightCapital (for financial planning, Holistiplan (tax planning), or BlackDiamond (performance reporting), as well as, partner with other centers of influence (COIs) to ensure a smooth workflow.
Want to see my workflows? Click below.
Remember, good operations are the silent heroes behind every successful financial advisory firm. (CLICK HERE FOR YOUTUBE VIDEO AT THIS TIMESTAMP)
Conclusion
Starting your own RIA could be the game-changing move you need to elevate your financial career. It offers freedom, potential growth, and the ability to provide highly personalized service to clients. Sure, it requires effort and careful planning, but the potential rewards far outweigh the challenges. It's time to challenge the norm and step into the realm of financial independence.
Are you considering going independent? If so, you might be a fit for my “RIA Launch Academy” a cohort-style program that helps existing financial professionals launch their ideal firm in a compliant-friendly way in less than 90 days. Click here for more information.
Are you thinking about becoming a financial planner? It's a great career choice, but it's not without its challenges. In this final installment we look at the factors in play when you finally decide to make the leap and pursue becoming a CERTIFIED FINANCIAL PLANNER™.