Should You Go Independent? Ask Yourself This First.

Thinking about going independent?

In this episode of Advisor Turntable, Brendan Ryan sits down with Tricia Brady, AssetMark business consultant and author of Dance to Independence, to discuss what advisors should know before making the leap.

Tricia talks about:

• Misconceptions about going independent
• Why "the payout" is the wrong reason to make the move
• Compliance and operational considerations
• The mindset shift from advisor to business-owner needed to succeed
• Mistakes advisors make during the first 12-18 months
• The role of AI, marketing, and advisor branding

The conversation also explores another major trend shaping the industry: the historic transfer of wealth to women. Tricia explains why so many widows leave their financial advisor after a spouse passes away and shares practical ways advisors can build stronger relationships with both members of the household before that transition occurs.

Whether you're evaluating independence or looking to future-proof your practice, this episode offers actionable insights from someone who has helped advisors navigate both for decades.

This material is provided for informational purposes only and does not in any sense constitute a solicitation or offer for the purchase or sale of securities nor does it constitute investment advice for any person or a recommendation to take any action. Investment themes and individual securities mentioned may or may not be held in any or all client accounts. The material may contain forward or backward-looking statements regarding intent, beliefs regarding current or past expectations. The views expressed are subject to change based on market and other conditions. The information presented in this report is based on data obtained from third party sources. Although it is believed to be accurate, no representation or warranty is made as to its accuracy or completeness.

The views and opinions expressed throughout this presentation are those of the presenter as of date the podcast is episode is published. The opinions or outlooks may change over time with changing market conditions or other relevant variables.

Some of our podcast guests may be clients. There was no compensation exchanged for their participation. 

Transcript

SPEAKER_01 0:02

Hello everyone and thank you for joining us on another Advisor Turntables podcast. We have with us today Trisha Brady from Asset Mark. We've worked with Trisha's firm obviously for a very long time. But really today we're talking about some different topics. She is an author. She is a big resource for advisors, particularly those looking to go independent. And she's really just spent a very long time in her career working with RIAs from a number of different angles. I just I'll let Trisha kind of kick it off and explain her background quickly and get into a little bit about uh the book she recently wrote at the end of the year and some of the implications for uh financial advancement.

SPEAKER_00 0:48

Thank you, Brendan. Thanks for having me here. Uh look forward to having this conversation. Um, so I've spent, I'd say, more than 30 years in financial services space. And in the last 10 to 15 years has been more in the wealth management REA side. So I've actually been a COO, CCO for multi-billion REA. I've worked with all three of the largest aggregators, so Dynasty, Hightower, and Focus. And now with Asset Mark over the last four years, I'm a business consultant working with advisors on the practice management side and as the subject matter expert when it comes to the REA or going independent space. So I work with a lot of advisors, just vetting them to understand, you know, does it make sense for them with all the consolidation these days, you know, with Ozaic and LPL and Commonwealth and everything that's happening? They're like, you know, I don't know if I want to be worried about getting bought or sold again. Um, so maybe it makes sense for me to go on my own, but I don't know what I don't know. So I have a lot of those conversations because I've sat in the seat. I kind of understand a little bit of it, and I help them through that process. So that's that's kind of the background there. You know, I've got four adult kids also look exploring this space too. Um my son actually just got his CFA, so very big deal in our in our space. He's working at UBS. And um, you know, it's been interesting being in this male-dominated space for a while too. So having three daughters, I've been trying to show them kind of what it looks like to be able to kind of find your your way in a space that's dominated more by men and have that voice out there. So I'm looking forward to this conversation and talking about maybe the book and where it goes.

SPEAKER_01 2:48

So dance to independence. Obviously, the intended audience is financial advisors looking to go independent, kind of alluded to this change or progression that's occurred in the industry with these massive aggregators, private equity, um, just the consolidation amongst the largest firms. It seems like it's never-ending, and there's this consistent bid on these advisory businesses. That's probably a totally different environment than the one a lot of seasoned advisors got into where it was more like a job and now it's become a job that can become a business. Um, and that's sort of the leap, I think, that you're making going independent, is you're you're turning into a business, which is obviously has its own benefits and drawbacks. But I a core message of the book, I think, was and why you know it's called a dance, is that it is a step-by-step process in your mind. You're laying out this template for the advisors. I think it's easy sometimes to make a decision or have an idea. I think following through with it is often the hard part and maybe the daunting part for people. Uh is that fair to say that that's kind of why you found that having this almost like a checklist is a more effective way for walking through this this process for advisors?

SPEAKER_00 4:02

Yeah, I'd say uh going back to kind of where I came from, I've been working with a lot of advisors over the years, right? And helping them kind of think through what they don't know and does it make sense? Because it doesn't make sense for everybody. And I've been building resources along the way, um, working at each of the areas that I've been working at. And I just came to a point where I was like, you know what, maybe I can get something out there that can help them just guide them through the whole process. And a lot of it starts with the why, right? And it doesn't make sense for everybody. Is it it can't be just about the payout, right? Why is it that you're looking to make this change? And do you have that business owner mindset or are you just an advisor, right? And you what you just like working with with clients and that relationship aspect, and it and the change doesn't happen just right away. You know, it could be just a conversation that happened, or a moment of clarity that happened, or they got sold, or something happened that they are like, you know what, this isn't what I started this business to be doing. And I feel like I've been following some other path and not really the path that I have a purpose for, right? Um, that aligns better with who I am and what I'd like to do. Um, so as I started putting stuff together and I'm talking to advisors, I'm like, oh, it would be great to have a resource for them to use. Um, and last year I got asked to co-author Beyond the Broker Navigating Financial Advisory Independence, and I wrote a chapter in that book. And what I did is I interviewed three women, it was all women that wrote the different chapters, all aspects. It was marketing, compliance, consulting, recruiting, all areas of financial services and all aspects of the business. And I had three women, particularly through asset mark, that I had actually helped them leave their broker dealer where they were and helped them guide them go to go independent and start their own RAA. And there was a lot of fear and just unknown at the beginning. So, in order for me to do my chapter, I interviewed each of them to get you know a good feel that I can intertwine their stories and what we did and how we approached everything. And so that chapter actually spurred me to say, okay, now I know what to do in putting a book together. Um, maybe I can take everything that I've done and be able to guide people through for the different sections of going through that whole process from the why, understanding the fear, um, to, you know, what is it that I need to do to prepare for that leap, and then making the move, and then beyond the move, and then helping them through every step with a workbook that's aligned with that. So the workbook is a strategic planner and guide that at the end of every chapter, there's different things that we talk about, and I refer them to prompts and checklists and resources and things that I've put together in the workbook to help guide them through that process. And it's been, I think it's really been helpful. And then Mark Tabersion, um, who's a legend in our space, um, I've known him a long time. I asked him if he would be willing to write the forward for me. And um, he's like, as long as we align with everything we're talking about, I would love to do that for you. And so he wrote the forward, um, which was a great honor to have him just really supporting what it was that I was doing. But it was just taking that leap and talking to advisors every day that are going through this transition, and I'm already sharing these ideas. How do I put it in a place that's a practical use that they can use and relate to and learn from? And now it's also audible too, so they can actually listen to it and go through that. And as I'm talking to advisors that are even going through the transition now, at the end, I'll say, Oh, by the way, I have a book. So you can go and listen to the book. And if you have any other questions, come back and talk to me and we can go through it together. It just helps a little bit more.

SPEAKER_01 8:12

Yeah. Do you find that a big apprehension in advisors looking to go out dependent is they don't know where to start and internally there are no resources that broker dealer is not incentivized to help them at all. So this has to come from outside, right? And and then just see.

SPEAKER_00 8:31

Well, I think there's two sides. I think sometimes they think, oh, I can just do it. The broker dealer's not really doing anything. Um, I don't really understand what they're doing, and and they're taking a lot of money off the table for me. So I want to just go and do this on my own. And I'd say nine out of ten, maybe eight out of ten, they're gonna be okay after doing that. But then there's others that just really like being an advisor. And once they decide to go off on their own and they realize all the hats that they're now wearing and that they need to be working on, it's just becomes overwhelming. Um, and even the idea, I know I'm ready. And then once we talk about all the things that they need to start thinking about as we start to build it out, it is really overwhelming. And you need to be able to take it in bite sizes and understand again what you don't know. Um, you know, especially the why, right? It can't, again, like I said, it can't be about the payout. If that's all it's about, you're never gonna get out of your own way and figure out what you need to do. There's gotta be more alignment, more flexibility. I know there's advisors that, you know, they feel because it's based on the lowest common denominator, they can't market do marketing the way they'd like to market, right? Or there's certain strategies that they would like to work with that they can't. Maybe there's certain technologies they want to use, or just be a little bit more efficient. So if they're being restrained in the things that they want to do that make them more about who they are and their purpose, then it makes more sense. Also, if they've got that business mind uh mindset, right? Business owner mindset, that also helps because they're me, but they're working more on the business than in the business now. They might not be as much of an advisor as they are a business owner, and just understanding that mentality. Um, compliance is the biggest thing where they don't know what they don't know. You know, it's been taken care of for them for a while, and then now all of a sudden I gotta worry about everything. I gotta register my my firm, right? And then I gotta make sure that everything I'm doing is is up to regulations and doing the way I need to do it. Um, so there's a lot of things that they don't completely understand until they're really in it. Um, and even having a workbook and what I have to provide for them, people don't really just take a workbook and go and run with it. So I think it's good to have something there, but they really need that coaching and that support to walk them through each phase. The biggest one is the the beginning. You know, what am I fear afraid of? What is my why? You know, why is it that I'm really doing this? And what's what's in my way? What are the obstacles that I have to figure out? And the dance is all about finding those right partners, you know, the the custodians, the compliance, the the platforms, the different vendors that you're working with, even your trusted partners or friends or acquaintances that you can run things by and they can tell you honestly, you know, what's right, what's not right, what's working, um, instead of you trying to do it all on your own, because it's very difficult to be doing it solo.

SPEAKER_01 11:47

A couple of things I thought of as you were talking about that one thing we've heard frustration on from some advisors is a lot of these new AI tools are heavily restricted. Is that like you you mentioned kind of advisors that are more entrepreneurial and wanting to use things that are not allowed? Has that has that like marginally pushed some people to try to go with tendons?

SPEAKER_00 12:08

That is that is some. I uh more I'm hearing is I want to do a podcast or I want to do certain marketing, or there's other things that I want to be able to leverage as it relates to investments or working with my clients that I can't do. Have a little bit of more of your own brand versus I think it's your own branding and being able to not be restricted so much that because when you're in a broker dealer, it's based on the lowest common denominator, right? So you can't do certain things because then you've got to worry about letting other people do it and it might not work as well with them or they might not be equipped enough as an advisor to be able to give them some more leeway. Um, so they lose that flexibility. And so I think that's one of the main reasons I hear is I want to be able to communicate to the clients the way I want to communicate. I don't want to have to do everything the way the broker dealer wants me to do it. Um it's just yeah, it's changed a lot. And I think AI, yeah, there's a lot of tools out there. I mean, Zox and Jump, and there's a there's a bunch on the note-taking side that a lot of the broker dealers are allowing them to use now and are getting more comfortable with that.

SPEAKER_01 13:28

Right.

SPEAKER_00 13:28

Um, but there's much more out there that is available that I think people are still afraid of that just waiting to make sure again, that lowest common denominator. We don't want somebody going off and doing things they shouldn't be doing. Um, so we got to stop it for everybody until we're comfortable with the way it's being handled.

SPEAKER_01 13:51

If I am an advisor, I read your book, I'm convinced I want to go independent, what's that time frame usually look like?

SPEAKER_00 14:00

So, and that varies too. I mean, it could be if it's state, if it's um SEC, if they're gonna be completely 100% advisory, or they're gonna be hybrid, or they're gonna tuck in. You know, it it's what does that path look like, right? Um, and then it depends on you initially, right? The advisor on getting all the documents and everything in place that they need to get in place, right?

SPEAKER_01 14:27

While you're doing your job.

SPEAKER_00 14:29

While you're doing your job, and then you're keeping it quiet because you're trying to figure all that out. Um, I would say for the registration process, that could take, you know, a month to three months. I think a month is pretty quick. Um, and if states take a little longer than the SEC takes, depending on if it's a holiday, you know, it's the end of the year, or there's certain hiatus that this that the government's on, you know, it depends on on what time of year it is. I would say one to three months, but before that starts, you have to have your ADV, all your disclosure docs, you know, all your financials, everything that your agreements, all the things in place that you need to submit to to go through the registration process. So if you don't have the time and the resources and the people there to put all that together, um, that could be what takes the longest time for you to put together. Um, and then um, you know, so I would give somebody maybe six months to a year to really plan that out. And then you're looking at your billing and your revenue generation, right? And making sure you're timing it around that aspect because you don't want to have to go after your revenue. You want to be able to have them come after it from you, um, depending on that timing. So just um making sure you're working on the timing there too.

SPEAKER_01 15:56

So to me, it seems it seems like the advantages are maybe obvious and the disadvantages are not so obvious. What are the what are the biggest things that you find that causes people to fail and they initially think they want to go independent, they don't, or there's some building block. And then how do how do the broker dealers combat this? Because it seems like it's a pretty consistent secular shift in the industry.

SPEAKER_00 16:23

Well, first the broker dealer is combating it. I think a lot of them are have actually created like corporate RAAs, W-2, they're going through and or even like you're independent to a degree, um, and we're allowing you to do a lot. There's still some restrictions, but we're allowing you to do that. And some of them, you know, will work with advisors that uh maybe have a lot of commission business and say, okay, you can keep your commission business here and have a hybrid business, and we'll work with you there. Um, and it depends on the advisor. You know, if the advisor feels like they're a business owner and they've been doing it all on their own to begin with, um, more than likely they're gonna just say, I'm gonna do this on my own, and they're gonna negotiate as much as they can to split without making it too difficult on both sides. Um, you know, the things that I think I've seen advisors, it's the planning the leap that I think is the most important and the preparation, you know, doing your cost analysis, understanding what your model is gonna look like and the path that you're gonna go on. You know, what are you gonna do for compliance? What is your staffing gonna look like? Um, are you gonna be hybrid? Because if you're hybrid, then you've got two different regulatory agencies, you've got different workflows, there's more complexity there, right?

SPEAKER_01 17:54

Some personalities that imagine just being Yeah.

SPEAKER_00 17:56

I mean, and now you're HR too, right? So there's a lot of things that are coming to play. So it's not just okay, I'm flipping the switch and I'm going independent. Now you've got to deal with all those things that you didn't have to deal with before. Um, and you don't really know what that means until you're in it. And compliance is a lot of times the most, the biggest one, biggest hurdle too, of all the things that they need to make sure are in place. Um, you're, you know, depending again if it's SEC or state, but you have all your attestations, your email reviews, your marketing reviews, making sure that you know you're doing everything the right way while you're still being an advisor and doing that too. Um and, you know, I think when you're solo, sometimes it's a little bit more difficult, but I've seen people do it. The the hardest part is really that first, I'd say 12 to 18 months when you're building all the infrastructure out and give it getting everything in place. It's the most expensive time, right? But once they've gotten everything in place and they've got that foundation and they're starting to move um forward, and the clients are onboarding and you know, everything is working, a lot of them say, Why didn't I do this sooner? Um there's a small percent that are like, oh, I should have just uh done something different. Or maybe I bridge and I tuck in somewhere for a while and just get everything set up the way I need to get it set up and make sure I'm comfortable enough to go on my own.

SPEAKER_01 19:30

Yeah, you you mentioned how it can be difficult for someone solo, and I've noticed that tons of events, especially the ones that Asset Mark puts on, the networking between advisors is a lot greater than I guess I would have expected. Is there some strength in numbers aspect to this where advisors come to know each other over the years and realize that they could do this together and create a joint practice and simplify it?

SPEAKER_00 19:55

There's a little of that. Yeah, there's there's a lot of actually anytime I'm having conversations and advisors are coming to me thinking about going RA, I I will I will talk to them, I'll kind of vet them and understand where they are. And then I have several advisors that have gone through that transition that I'll introduce them to, I'll have them talk to.

SPEAKER_01 20:23

I want to change directions just a little bit quickly, but presumably one of the I think one of the draws of going independent that you alluded to is the aspect of maybe future-proofing your business a little bit. You can adopt things faster, you can kind of move with the times a little bit quicker. And one topic we talked about was the giant generational wealth transfer that's occurring between baby boomers and millennials, and how that's reshaping the financial advisory business, how it's hard for advisors to capture the younger generation. I think we've maybe heard the same stats of the high percentage of people my age, millennials, firing their parents' financial advisor. And you actually brought a new angle to that I hadn't thought about, but it's similar for women. Obviously, in this is a pretty male-dominated industry, there's a stereotype that women make the consumption decisions in a household, and often the men make the financial decisions, so that probably biases a woman's interaction with the household financial advisor. But it sounded like you gave me a statistic that was very similar in that when women are inheriting a financial advisor relationship, they are firing them at a very high rate as well. So obviously the category is underappreciated, underserved in the market, and there's seemingly a pretty valuable niche in trying to meet that for women advisors or male advisors. Can you just talk a little bit about how you've worked within that world?

SPEAKER_00 21:52

Yeah, I I this is the largest transfer of wealth to women that are in. Industry has ever seen. So there I think it's about 104 trillion that's going to be over the next two decades. Forty trillion is going from husband to wife because women are living five to six years long. And 47 trillion is to the next generation. And they're thinking primarily to the daughters, because the daughters are handling a lot of the life transition things that are going on within the family.

SPEAKER_01 22:30

They're working more closely with their parents.

SPEAKER_00 22:32

They're working more closely with the families, right? Um, and what we learned from this is that within the first 12 months of the spouse passing away or it going to the woman, they fire that advisor. 70% fire the advisor. Not because the advisor wasn't performing well. It's because they just didn't have the relationship with that advisor. You know, the advisors meet. A lot of times they're doing annual reviews and they're meeting with both couples, but the conversation just by default always is particularly with the male that's in there. You know, they might be talking about the ball game or they're talking about the markets and they're talking over the woman's head because a lot of the you know older generation, you know, they they've been never really given that licensing to be able to take charge of the finances, right? Um so they're in there nodding their heads and they're listening to things and they're smiling. And then when the time comes um and the husband passes away, they don't feel like they were ever connected or part of those conversations. So it's easy for them to move on. And so what we're learning is that you know, advisors should be thinking about how they're communicating to that female client, right? Um, you know, maybe using Chat GPT or other tools out there to simple the terms a little bit and send stuff to them ahead of time before they have the meeting so they understand the terminology and the things that are being said, right? Maybe you have different venues that you're meeting with women that align with what's going on with them, maybe like um divorce attorneys or therapists or other um partners that that women are using that they're already having conversations with that you can be joining and they're a little bit more vulnerable and are going to be sharing things that are going on in their lives, right? Um, or going through like life transitions, you know, they have disport disproportionately they're being, you know, widowed, they're being caretakers, so they have interruptions in their careers, you know, and going through, we have a piece at Asimar called our life transitions piece, and having something that you can meet with them and say, okay, are there changes that are happening in your career, legacy, you know, financially that are happening in the near term or in the future, um, that you can start having those conversations a little earlier and help prepare them for that? We've also created um life preparedness kits, right? So, you know, having that family meeting and being able to make sure they understand where all the documents are, you know, where all the the website uh passwords are, and you know, what is it that that they need to make sure that they have taken care of if something happens to their spouse? You know, what are all those legal documents that they need? So having some checklists and something, some resources that you can sit with them earlier instead of at the last minute, because when the event happens, you've already lost them. They're gonna go on to somebody else. But if you're developing that relationship earlier, I think it's gonna help when that transition of wealth happens, that you're there by their side when it happens and they're gonna stay with you a lot more often than than they would leave.

SPEAKER_01 26:24

Yeah. I mean, it seems like this is a pretty big opportunity. You mentioned your daughters being interested in the industry or in the industry already. It seems like it's a pretty big opportunity for female advisors as well to try to capture this market. I'd imagine maybe m my perception, obviously, somewhat ignorantly, would be that a long time ago in this industry, if you were a woman, maybe you felt pressure to try to fit into the men's game. And maybe now actually just doubling down on being a woman and going after that market might be the a really attractive from a business standpoint.

SPEAKER_00 26:58

You're right. If I look at if I look at my career, you know, I started in the investment side at like Newberger and Berman and Dreyfus, and there weren't a lot of women in this space, and we were treated a little, a little different, right? And I think through my career, I have three daughters, and they're they're not all thinking about this space. My youngest is right now. Um, but just showing them how they can have more of a voice and and and trying to get more women into the picture uh in this in this industry, in this space. I sit in meetings and it used to be, say, one or two other women in there, and now maybe there could be five or ten out of a hundred. Um, it's still not great, but I'm working with a lot of teams that are one of the teams actually um Jessica Weaver, who um runs the Women's Wealth Boutique, she worked for her dad's firm, and she left and started her own RAA and only has women advisors that work in that firm. She started her production company, she does a podcast, Women Behind the Millions. And we have a scholarship fund that she does with all the books to help with young girls getting into this space to help them go to school. So I think the more that we can do to empower young girls to be interested in the space, the more, you know, the better it is. I mean, there's so many different organizations now that are um that are focused on trying to get more women, more young women in into the space, but they don't really understand what it's all about. I think they think it's finance and you know, 80% is a relationship, and that's where we're we're strong, right? It's that emotional intelligence. So getting them to really understand um what this career looks like, I think, is what we need to do more of. Yeah.

SPEAKER_01 28:54

Yeah, I would think if you're a if you're a male financial advisor and you're hearing what we're talking about and this risk to their business, it might be simpler for you to try to hire a woman to help you or you know make her an advisor within your practice to to target that or help you with the issues inside your own book versus trying to address it directly yourself, even. That could be another area.

SPEAKER_00 29:15

Yeah, I agree. It's good to have them less um there to support each other. I think some women might listen more with men. It depends on the man, right? Um but and then then women do understand each other. So there's a more of more intuitive understanding of what it is that we need and want and how we need to be spoken to. I think to being in the industry a long time, there's too many assumptions about what people know, right? And so making sure that you're clear and explaining everything. Women aren't dumb, but just making sure that they understand, like I said, the terminology and the things that you're talking about clearly and in a way that they can interpret it and not making them feel like you're condescending or making them feel like they're inferior to others that are in the space.

SPEAKER_01 30:11

Yes, that seems like a surefire way to lose the client.

SPEAKER_00 30:15

Yeah. But it happens a lot.

SPEAKER_01 30:18

Yes. Uh yeah, this was great, Trisha. Thank you. Um before we close out, is there anything else you'd like to say or messages you'd like to get out to advisors that are thinking about going independent?

SPEAKER_00 30:32

You know what? I think it's just it's not even just going independent. It's making sure that any career or anything that you're doing in business, right, you're intentional and you're you're finding your purpose and and doing what fits you and and your your path and not being afraid of of where it's going to go. Um and I think these conversations need to be out there, yeah. And focus on the women, you know, make sure that you're you're hearing them and you're you're educating them and supporting them on their needs, and and they're part of that couple, and it's not just one-sided. These conversations are really important.

SPEAKER_01 31:19

Great. Thank you very much.

SPEAKER_00 31:20

Well, thank you for having me. It's been great talking to you.