Going Independent Is Only the Beginning: What Are You Really Building?

[00:00:00] Once again, I’m joined by my co-host and RIA expert, Ray Gettens. Welcome to the show, Ray. Thank you, Jonathan. Great to be here. 

Ray, we’ve spent a lot of time on this podcast talking about what it takes to make the move to independence.

We’ve talked about compliance, transition costs, client communication, timing, and many of the things that can make an advisor hesitate. Yes. Yes. We’ve sure covered a lot. Yes, we [00:01:00] have. Uh, and in our last episode, we walked through a real transition you were involved with that happened in less than seven days, and with almost no out-of-pocket cost But today, I wanna go a little farther down the road.

Actually, let me put it this way. Let’s, let’s say the move is done, the paperwork is finished, the clients are coming over, the new firm is up and running. What’s actually going to be better? That’s the question advisors need to be asking prior to the transition, actually. The transition might take a few days, like we saw in the case study we shared in our last episode, or it might take a few weeks, but the business you build afterward could shape the next 10 or 20 years of your career.

So yes, that- that’s a big difference. A few days to make the move, but years living with the decisions you made around it. Exactly, and, and that’s where some advisors run into a problem they didn’t expect. Or, or maybe the better way to say it is they run into a problem they didn’t plan for. They make the move, they gain more control, maybe the economics are better, they have a new name, a new structure, a new [00:02:00] technology, but, but when they step back and look at the actual practice, a lot of it feels surprisingly familiar.

Same workload? Same workload. Same headaches? Some of the same headaches, maybe even a few new ones. But at least the logo is different. The logo looks great, but the advisor may still be spending too much time on things that pull them away from clients. They’re still the person every question comes back to.

They may still be managing investments, solving operational problems, chasing paperwork, and trying to hold the whole business together. The structure changed, but the, the experience didn’t improve nearly enough. That’s an interesting way to look at it, yeah. Advisors spend so much time thinking about how to leave that they may not spend enough time thinking about what they’re trying to build.

Right. Independence gives you a real opportunity to rethink the practice. For example, what you want your clients to experience, what kind of advisor do you want to become, where should your time go, [00:03:00] what support do you want around you? And if you don’t answer those questions, you may carry the old practice into the new firm.

Exactly. So today’s question is, are you building a better firm, or are you recreating the same practice in a new structure? Yes, that’s the question. And stay with us through the end because we’re also gonna tell you more about our August conversation with AssetMark President and CEO Michael Kim. That interview takes a broader look at where advice is heading, what clients are beginning to expect, and what advisors may need around them to deliver it.

Let’s start with the client. An advisor is thinking about independence. What should they be asking about the experience they wanna create on the other side? I, I’d start with one simple question: What’s actually going to be better for your clients? Not just better for the advisor. Right. The advisor may get better economics, more flexibility, or more control.

Those things matter, but what changes for the client? Maybe you’ll have more freedom in the investment solutions you use. Uh, maybe communication improves. Maybe you [00:04:00] can choose better technology. Maybe you can bring in estate planning, tax, business exit, or other specialized resources that weren’t easy to access before.

So independence becomes a chance to improve the whole client experience? It should. You may finally be able to shape the service model around the client instead of around the limitations of the firm you’re leaving. That sounds obvious when you say it, but, uh, well, I’m not sure every advisor actually sits down and defines it.

A lot of them don’t. They, they know what they’re frustrated with. Maybe it’s the payout. Maybe it’s bureaucracy. Maybe it’s product restrictions, outdated technology, or constantly having to ask permission. They know what they wanna get away from. Exactly, but getting away from something only tells you half the story.

You also need to know what you’re moving toward. Otherwise, you can solve the immediate frustration and miss the bigger opportunity. That’s what happens. You may improve the economics and still run the same kind of practice. You may have more flexibility but [00:05:00] no more time. You may have access to better tools but never change the way the work gets done.

And from the client’s point of view, not much really changed. Right. The advisor may feel the difference, but the client may not. So before moving, the advisor should be able to finish this sentence: “My clients will be better served because…” Yes, and the answer should go deeper than, “I’ll have more products,” or, “I’ll have a better payout.”

The client is usually thinking about something else. Can you help me make better decisions? Can you help my family? Can you bring the right people into the room? Can you understand the whole picture? Can you make this easier for me? Those are much more human questions. They are, and that’s where the real opportunity sits.

That brings us to another question. What kind of advisor do you wanna be once you have more control over the business? That’s a big one. A lot of advisors built their value around investment management. They selected the portfolio, followed the [00:06:00] markets, and made allocation decisions. There was real value in that.

And there still is. Absolutely, but clients are asking for more now. They’re dealing with retirement, taxes, estate issues, aging parents, business transitions, wealth transfer, charitable planning, and all the things that come with more complicated financial lives. Clients, clients don’t separate those into tidy little categories.

They don’t. The client isn’t thinking, “This is my investment problem, this is my estate problem, and this is my business problem.” To them, it’s their life. And they want somebody who can help connect the pieces. Exactly. They want someone who understands what’s going on and can help coordinate the right people.

Which, which doesn’t mean the advisor has to become what an attorney, a CPA, an insurance specialist, and a business valuation expert Thank goodness. Nobody has enough hours in the day for that. Or enough credentials on the wall. Exactly. That’s where advisors sometimes get themselves into [00:07:00] trouble. They hear holistic advice and think they personally have to become an expert in everything.

They don’t. The better approach is to understand the client well enough to recognize what’s needed and bring the right expertise into the conversation. So the advisor becomes the central point of trust. Yes. You, you may not personally do every piece of the work, but you help make sure the client isn’t left trying to connect everything alone.

That’s a much bigger role than managing a portfolio. It is, and if that’s the kind of advisor you want to become, your operating model has to support it. This is where the bottleneck issue shows up, isn’t it? The advisor wants to offer more, but, yeah, well, then everything starts landing on their desk. That, that’s exactly what happens.

It usually starts with good intentions. The advisor wants to stay close to clients. They care about the quality of the work. They don’t want anything to get missed, so they keep a lot on their own plate. At first, that probably feels [00:08:00] responsible. It does, especially when the firm is small. You think, “I know how this should be done, so I’ll just handle it.”

The, the famous words, “I’ll just do it myself.” Exactly. Then the firm grows. Now the advisor is meeting with clients, answering team questions, reviewing investments, dealing with technology, talking to vendors, following up on paperwork, and trying to bring in new business. And all of that’s happening at the same time.

All at once. Before long, there’s no room left. Meanwhile, the firm may look very successful from the outside. That’s what makes it easy to miss Revenue may be growing, new clients may be coming in, everything looks good, but the, the advisor’s time has become the limit. So the firm can only grow as far as the advisor can stretch.

Exactly. And at some point, there’s no more stretch left. What are some early signs that the advisor has become the bottleneck? The advisor is copied on almost every internal email. [00:09:00] The team keeps waiting for approval. Client service slows down when the advisor is tied up in meetings. The advisor takes a few days off and comes back to a wall of decisions.

That last one probably hits home for a lot of business owners. It does. You take three days off and spend five days catching up. That’s not exactly freedom. No. Then there’s the phrase, “It’s faster if I just do it myself.” Which may be true once. It may be true that day, but if that’s the answer every time, nobody else learns the process, nothing gets documented, nobody truly owns the work.

So the temporary shortcut becomes the permanent system. That’s exactly what happens. What, what’s a simple way for an advisor to test whether this is already happening? Ask what happens if, let’s say, you’re unavailable for a week. Can, can the team keep moving? Can clients still get answers? Can decisions be made, or does everything begin to back up?

That question might make people uncomfortable. Probably, [00:10:00] but it’s useful, and it doesn’t mean the advisor is doing a bad job. It usually means the business has outgrown the way the work was originally organized. I can hear an advisor saying, “Um, I’m going independent because I want control. I don’t wanna hand my business over to somebody else.”

How do you answer that? I understand it. Control is one of the main reasons advisors consider independence. For some advisors, well, it may be the main reason. But control doesn’t mean you personally have to touch every part of the business. So what does control mean? You decide how the firm operates. You decide what the standards are.

You decide how clients are treated. You decide who’s responsible for the work and which systems and partners you use. That’s control. So the better question isn’t, “Can I do this?” The better question is, “Should I be the person doing this?” That’s an important difference. Most advisors are capable of learning almost every part of the business.

That doesn’t make every part of the business a good use of their time. Where does the [00:11:00] advisor usually create the most value? In the places where trust, judgment, and relationships matter. It’s the conversation with a client who’s nervous about retiring. It’s helping a family work through a difficult decision.

It’s understanding what’s really going on beneath the numbers. It’s leading the team and deciding where the firm is going. That’s the work that’s hardest to replace. Exactly. A routine reminder, a document workflow, or a standard account update probably doesn’t need the advisor’s personal attention. But those little things can take over the week.

They can take over the whole calendar. Which is why the advisor needs to picture what they actually want their week to look like. Yes. What kind of work do you want to spend most of your time doing? What gives you energy? What do you already know you don’t want to manage every day? Because better economics won’t feel very exciting if you’re miserable running the business.

That’s right. You can build a profitable firm and still hate an ordinary Tuesday. Okay, let’s make this practical. An [00:12:00] advisor is seriously considering independence. How should they start sorting through everything that comes with running the firm? I’d take the recurring responsibilities and put them into four buckets.

Okay, bucket one. Only I should do this. These are the things that really depend on your judgment, relationships, leadership, or vision: key client conversations, complex planning, setting the direction of the firm, leading the team, defining the client experience. The things where the advisor brings something that’s hard to replace.

Exactly. Bucket two? Someone on my team should own this: scheduling, follow-up, routine client service, account administration, workflow management, document preparation. And own is the key word. It is. There’s a big difference between giving someone a task and giving them ownership. If the advisor still has to remind them, approve every step, and check whether it got done, the work [00:13:00] never really left the advisor’s desk.

So that’s delegation in theory. Right. Bucket three Technology should handle this. Reminders, task creation, document routing, status updates, reporting, moving information between systems Technology should remove work Exactly. It shouldn’t become another thing the advisor has to babysit. And bucket four? An outside partner could handle this.

That might include investment management support, platform infrastructure, compliance support, technology implementation, specialized planning, or practice management. And we’re not saying outsource everything. No. The, the point is to decide what makes sense to build internally and where an outside partner may already have the people, expertise, and systems you’d otherwise have to build yourself.

So there’s not one perfect version of independence. There really isn’t. One, one advisor may want an internal investment team. [00:14:00] Another may want outside investment support so they can spend more time with clients. One advisor may love operations. Another may want very little to do with them. You, you have to know yourself Exactly And avoid building somebody else’s idea of the perfect RIA.

Build the firm that fits you, your clients, and the way you actually want to work. You’ve mentioned the normal week a few times, and I, I think that’s worth staying with. Um, advisors spend a lot of time thinking about revenue payout and the big picture. They may not picture a regular Tuesday. That’s exactly right.

What does Tuesday look like? Are you in meaningful client meetings? Are you working on growth? Are you leading the team? Or are you spending half the day dealing with an operational issue? Or trying to get two systems to talk to each other. Exactly, or spending hours preparing for one meeting because the information is scattered in six different places.

So the business model eventually shows up on your calendar? It does. Your calendar tells you what you really built. And if [00:15:00] you don’t decide how you want to spend your time, other people and other problems will decide for you. What else should an advisor picture before making the move? Uh, what, what happens when you take a vacation?

What happens if you’re sick for a week? Can the team make decisions? Can clients still get answers? Does the work keep moving? Even if the goal isn’t to build a giant enterprise? You don’t need a giant enterprise. A small personal practice still needs enough structure that the advisor isn’t carrying the whole business alone.

There’s another piece here. Advisors may be designing the firm around the clients they serve today. Should they also be thinking about what those clients will need five or 10 years from now? Absolutely. Clients’ lives change. They retire. They sell businesses. They inherit money. Their parents age. Their children grow up.

And suddenly the questions they’re asking are very different. Exactly. They start thinking more seriously about taxes, estate [00:16:00] planning, charitable giving, family wealth, and what happens to everything after they’re gone. The firm needs to be able to grow with them. So if the advisor recreates the same investment-centered practice, they may already be behind where the client is heading.

That’s right. You don’t have to solve, you don’t have to solve every future need on day one, but you should know where the practice is going. What expertise will clients need? Right. Which relationships should the firm start building? Where can technology help? What kind of planning experience do you want to create?

Those decisions should shape the firm early. What tends to happen when the advisor says, “I’ll deal with all of this after the transition”? They become reactive. They hire when they’re already overwhelmed. They add technology after the process is already messy. They look for outside help after they’ve spent a year trying to do everything themselves.

By then, the habits are already set. Exactly. The team may already be used to bringing every decision [00:17:00] back to the advisor. And the advisor loses the time they thought independence was gonna give them. That’s the irony. They wanted more time for clients, growth, family, or strategic thinking Instead, they’re buried in the mechanics of the business.

Then they may start wondering whether independence was the mistake. That happens, but independence may not be the problem. The business may need clearer ownership, better systems, and stronger support. There’s also a long-term value issue. A firm that depends entirely on the founder is harder to transition or sell later.

Absolutely. If, if the client relationships, workflows, decisions, and knowledge all live inside one person, the business is tied very closely to that person. Which makes the business less durable. A stronger firm has clear processes, the team knows what they own, the client experience is consistent, the business can keep moving when the owner isn’t in the room.

That matters now, and it matters [00:18:00] later. Growth, quality of life, continuity, and eventually business value, all of it. Let’s, let’s pull this together. An advisor is considering independence right now. What should they sit down and answer before choosing the structure, technology, and support around the new firm?

Start with this: What do I want to be better for my clients? Good place to begin. Then ask, “What kind of advisor do I want to become? What do I want a normal week to look like? Which client relationships do I want to manage personally?” What work gives me energy? What work do I already know I don’t want to own?

What has to work on day one? And what can wait until later? Where could technology save time? Where do I need an internal team? Where could an outside partner give me more capability? And what kind of firm am I trying to build five or 10 years from now? That’s a much bigger conversation than simply asking which custodian to use.

It is. The custodian matters, the technology [00:19:00] matters, the transition plan matters, but those decisions should support the vision for the firm. They shouldn’t become the vision. Exactly. Okay, great stuff. I think this is a good place to tell our listeners about our exciting news. Yes. Let’s get to it. Well, here it is.

For our August episode, Ray sat down with Michael Kim, the president and CEO of AssetMark, during the AssetMark Leaders Summit. Michael has been with AssetMark for 16 years, and from where he sits, he gets a broad view of what’s happening across the wealth management industry and where things may be heading next.

And this wasn’t a surface level conversation. I mean, we, we covered a lot of ground. We talked about what clients are expecting from their advisors now, why the traditional portfolio manager role is changing, and why more clients are looking for an advisor who can act almost like a personal CFO. Someone who understands the whole picture and can help bring the right expertise into the room.

Exactly. Michael shares what AssetMark is seeing across [00:20:00] thousands of advisors and firms, and why advisors who can bring together investments, planning, technology, and specialized support may be in the strongest position going forward. You, you also got into some of the larger changes happening across the industry.

We did. We talked about consolidation, succession, the growing importance of scale, and the challenge of preparing the next generation of advisors to eventually lead and own these firms. We also spent time on AI and how AssetMark is using it to reduce repetitive work, create more capacity, and help advisors prepare for client meetings in a much smarter way.

So this really picks up where today’s conversation leaves off. Today, we’re asking advisors to think carefully about the firm they want to build. Next month, we’ll hear from someone with a front row view of how successful firms are evolving and what the next generation of advice may require. That’s exactly why I think advisors will get so much out of it.

Whether you’re considering independence, [00:21:00] already running an RIA, or trying to build more capacity and value into your firm, there’s a lot in this conversation to think about. Our August episode is Building the Advisory Firm of the Future, a conversation with AssetMark president and CEO Michael Kim. You won’t wanna miss this one.

And between now and then, think about this What do you want your firm to make possible for your clients, your team, and for you? If you’re considering independence, visit RIA Confidential and explore the tools and resources designed to help you think through the move. And if you’d like to talk through what your own future firm could look like, reach out to Ray Gettens, your RIA mentor.

Ray, any final thought? Yes. Take the time to design a business you’ll actually enjoy owning and your clients will value for years to come. That’s a good place to leave it. Thanks for joining us. We’ll see you next time on RIA Confidential. RIA

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