Breakaway Advisor: 5 Transition Myths Busted

Without turning this into an exposition on Joseph Campbell’s work, myths exist for a reason. They provide lessons and explain experiences, the world, and the journeys we may take. Sometimes the intent is to warn, though a better perspective may be to say the intent is to prepare. Some journeys are long, hard, and should not be undertaken lightly. This is certainly true of the journey to becoming a breakaway advisor.

Perhaps the risks, the work, the vision, and the planning required should be mythologized as, for some, they are Herculean trials. However, they should, first and foremost, be examined. As with most myths, there are exaggerations, inaccuracies, and storytelling elements designed to create heroes. You can still be a hero, but you needn’t suffer from unnecessary fears and concerns. Busting the myths associated with breaking away is just the first part of the journey.

Quick Links

• What is a Breakaway Advisor?
• Why Become a Breakaway Advisor?
• Benefits to Breaking Away
• 5 Breakaway Advisor Myths Busted

What is a Breakaway Advisor?

Breakaway advisors are financial advisors who currently work in a captive environment for a regional brokerage firm, bank, or wire-house. However, these individuals understand that their value is not about the name on the building where they work, but in their clients.

In seeking to leverage their book of business, they break away from those captive environments towards one that offers autonomy and ownership of the work they do and the success they earn. These options include forming their own RIA, or joining an existing one or becoming affiliated with an independent broker-dealer.

Why Become a Breakaway Advisor?

One of the greatest advantages for workers in the modern age is how technology has transformed our workplaces. This is, essentially, what frees up many financial advisors to break away from traditional structures. In essence, our comfort with technology means many more people are comfortable with digital access to financial advisors rather than requiring a formal office setting.

The biggest motivator for most breakaway advisors is dissatisfaction with one or more of the factors in their current position. Often, wirehouse and larger firms limit flexibility and freedom and some advisors find it suffocating to be boxed in by pre-determined products, strategies, or administrative limitations. Breaking away, then, becomes the best option to pursue one’s individual career goals.

Benefits to Breaking Away

While it’s great to work from home, or anywhere, there are significant advantages to becoming a breakaway advisor, including:

• Autonomy- The primary thing you’re breaking away from is someone else’s control over your clients, your business decisions, your investment strategies, or the products/services you sell.
• Control of business, clients, and more- Along with that autonomy comes control over just about every facet of your business. From administrative choices to clients, your business can take on the feel, tone, and values that reflect you as an individual.

• Leveraging technology- One of those items under your control is the technology you choose to leverage. From software and applications to securing your network, all tech decisions are yours.

• Legacy building- Whether succession planning is in your immediate future or on the horizon, breaking away can provide you with the autonomy to build a business to pass on, the way you’d like to build it.

• Greater flexibility- Whether clients, investments, technology, strategies, or another business decision requires you to be able to pivot or adjust, you’ve got greater flexibility to do so when you’re not locked into the oversight of a wirehouse or firm.

In short, while it comes with a significant amount of responsibility, the weight of which is clearly hinted at in some of the myths we’ll look at, the price is, for many, worth the cost of admission. For those with drive, vision, and strategy, breaking away frees them to create and build the career they’ve dreamed about and build a business that reflects them and their hard work.

Top Breakaway Advisor Myths Busted

While it’s been attributed to a variety of people, the adage is true, “If it were easy, everyone would do it.” The same is true of breaking away from firms and wirehouses. There’s a reason not every financial advisor seeks this path. That said, there’s still quite a bit of misinformation out there regarding the process, from decision to action. Let’s clear that up.

Myth #1- It’s too hard/too big/too much

It’s not easy. It is challenging. It is what you make of it. While numbers of breakaway advisors seemed to drop in 2020, bucking the previous year’s trend, that was likely due to uncertainty created by the pandemic. Breakaway advisor numbers are expected to return and grow this year and onward.

While not everyone is doing it, a lot of folks are. It’s well within reach for many advisors, as long as there is a vision and a strategy. Plus, it may be hard, but a majority of breakaway advisors find the work worth it and are happier.

Myth #2- I don’t have the volume/value to go alone

Most businesses start with nothing more than an idea. The vision breakaway advisors have, and one of the big motivators is growth. Further, the landscape out there suggests that growth is strong, 10-13.1% for RIAs, which means while you may be starting small, with the right strategy in place, you don’t have to stay that way.

Myth #3- My service will be limited by size

On the contrary, many advisors find their services and offerings open up once they’re not limited by the constraints of a wirehouse or firm. From the variety of services to the strategies and investment opportunities, you can leverage it all.

When it comes to administrative needs, partnering with an existing RIA can bridge that gap as they can provide support services to help you as you grow.

Myth #4- I’ll lose my clients

This is a real fear for all advisors in transition, not just breakaway advisors. However, some advisors estimate that 60-90% of clients will move with an advisor during any kind of transition. Further, employing some very important retention strategies and ensuring that you’ve been providing exceptional service prior to a move means you’ve built a loyal client base and strong relationships, the kind that move, and grow, with you.

Myth #5- I won’t have the tools or resources to build wealth or attract high wealth clients

When partnering with an established RIA, these networks can help you access those tools, like research, and those clients. Further, because you’re not locked in to a set menu of products and services you can tailor your strategies and investments to meet the needs of high-wealth clients. You’re far more flexible, with the same research and resources. It actually frees you up to do more.

Additionally, you’ve got the freedom to explore how technology and how a variety or resources can help you find the banks, funds, and equity providers to grow your clients’ wealth.

You likely have other concerns, worries, or fears regarding a move like this. And, to be honest, a little fear or worry means you’re not taking the decision lightly, and that’s in your favor. The desire to strategize and succeed is what drives most breakaway advisors and so learning to use those in your favor can actually improve your outcome.

You’ll want to talk to and connect with other breakaway advisors and you’ll want to talk to some trusted advisors regarding how to make the move that works best for you given your skillset, experience, and goals. That’s where the FA Match team comes in.

Not only do we have the experience to understand your position and your goals, but we have the network to help you make it happen. A lot of myths start with a dream or vision, then someone makes them a reality. Let’s work together to see where we can take you. Get in touch today, and let’s start planning!