Becoming an Independent Advisor

Because a number of larger broker-dealers also create proprietary products, they lose the ability to offer conflict-free advice. They’re basically selling the products that are the most financially rewarding for the company. Of course, the advisers at these firms understand that there is an inherent conflict of interest. And despite this conflict, one would hope that they are acting in their clients’ best interests. But if anyone does suffer from the situation, it is either the adviser or the client — not the firm.

But leaving the big-business environment to go independent is not for everyone; it’s for entrepreneurs. Once you become an independent adviser, you have to ask yourself, “What kind of adviser do I want to be?” Are you going to be exclusively a fee-based investment adviser or perhaps, a registered representative with a broker-dealer?

You have to answer the question, “What kind of practice do I want to have?” And you need to have a basic business plan. You’re going to have to deal with issues related to compliance, physical space, and staff management. You have to make sure that the structure you create is the one you want.

One of the biggest concerns associated with forming an independent practice is the fear that if you change your broker-dealer, your clients will leave you. It’s our experience that this business has always been and will continue to be all about relationships. If an adviser goes out on his own, he hasn’t changed. It’s just the letterhead on the statement that’s changed.

If you are ready to become an independent advisor, Summit Brokerage can show you how. Visit or contact us at (800) 354-5528

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