Every career path comes to a fork in the road and even the best jobs will one day put you in a position to reevaluate. For a financial advisor working at a large broker-dealer or wirehouse, discontentment could be a sign that it is time to pack up and start anew.

So what next? A good first step is to conduct an honest and thorough evaluation of your current career and future goals. The key is to know what to consider as your options. One of the most common options is to break away as an independent registered investment advisor (RIA).

Evaluating Your Career: The Satisfaction vs. Frustration Factor

According to Charles Cornett, director of business development at BNY Mellon’s Pershing, candidates considering independence often sense red flags courtesy of rising frustration at work.

"If when [candidates] think of their current firm, they’re filled with negative feelings, then they should probably begin to explore alternatives," says Cornett.

Pershing provides custodial services and consulting teams to help existing RIAs and newly-independent firms with transition support, an open architecture platform, comprehensive wealth solutions, and flexible technology.

“If the thought of staying causes dread, while the vision for the future provides energy, then they might be a breakaway prospect.”
Charles Cornett
BNY Mellon's Pershing
Another assessment to make is to look for any drag on your creativity or growth. Times change, and so do corporate environments. Along with that, policy, technology systems, and software also evolve. For Wesley Kaufman, founding partner of Richmond, Va.-based Heartwood Advisors, initially there wasn’t frustration from being at a wirehouse. He joined the brokerage in the mid-1990s with his team and enjoyed working there, but after the recession in 2008, his firm merged with a large bank. The result was a dramatic shift in the firm’s corporate culture.

"We went from a very advisor-client-centric business to being a sub-business of this big organization, and our business shifted completely," says Kaufman.

Similarly, advisors feeling frustrated over inertia or who hunger for something more innovative and challenging might want to consider taking a look outside the wirehouse. Cornett says advisors feeling hemmed in by specific wirehouse regulations, or who present growth ideas to management and meet resistance, might be ready to explore independence as well.

"If the thought of staying causes dread, while the vision for the future provides energy, then they might be a breakaway prospect," he says.

Evaluating Your Career: Affirming Your "Why"

Dislike for your current job or work environment is a start, but it isn’t enough. As the saying goes, it’s essential to "look before you leap," which Ed Swenson and Joe Rizzo of Dynasty Financial Partners say is easier for an advisor who has cemented early on their ideas of why they are leaving. Swenson, Dynasty’s chief operating officer, and Rizzo, director of RIA growth strategies, advise anyone craving independence to reach out to firms like theirs as soon as possible.

Dynasty is an RIA platform provider that can offer significant assistance to advisors, both in the breakaway process and as an established RIA. They assist advisors and teams throughout the process, helping to guide their decisions and making sure entrepreneurial advisors are prepared to get off to a running start.

The simplest way to affirm the decision to leave, according to Swenson and Rizzo, is to clarify your personal and professional why. That means asking yourself why it is vital for you both personally and professionally to make this move. You can also ask why you are pursuing it now, as opposed to six months ago or six months from now. An honest assessment can shed crucial light on whether or not you’re genuinely ready to begin a breakaway.

"That’s a difficult decision for a lot of people, and I’d say one out of 10 advisors out there is really ready to leave," says Swenson.

Evaluating Your Career: Financial Ability to Break Away

The next step in a breakaway transition is to evaluate your readiness to move. A key factor will be your ability to cover expenses and overhead at your new firm for an extended period of time.

There is indeed no "magic number" to hit, but knowing the new firm’s finances can weather the storm for up to five years and still keep the lights on and employees paid can go a long way towards calming any anxiety.

When Margaret Dechant, partner and founder of 6 Meridian in Wichita, Kan., reached this step, she also had to consider 12 additional moving parts in the form of her team. After nearly a decade together, moving as a unit meant sharing the new vision for how each person would fit and how the firm would be financially solvent in their new space.

"We’re going to be able to pay you, we’re going to be able to take care of you, we’re financially secure," Dechant remembers telling her team.

Ready to Make A Move: Consider A Custodian

If you’ve clicked with these suggestions and still feel comfortable with the pursuit of independence, a good next step is to look for outside guidance.

When you’re looking for outside guidance, the advisors we spoke with say it’s essential to ask other successful breakaways who they used and what they thought about the process. This could mean speaking with outside consultants or going straight to a custodian for more information.

On Margaret Dechant’s team, after speaking with several custodians, the team ultimately decided to go with Pershing. "We liked the fact that Pershing likes to be a true business partner," says Dechant. "They also are a part of BNY Mellon, which provides us with an avenue for credit needs that our clients have. And at that time, three years ago, when we were going through this, BNY Mellon was by far and away the best solution for that side of our business."

© 2019 Advisor Solutions. Advisor Solutions refers to the brokerage services business of Pershing Advisor Solutions LLC and/or the bank custody solutions business of BNY Mellon, N.A. Pershing Advisor Solutions LLC, member FINRA, SIPC, is a subsidiary of The Bank of New York Mellon Corporation (BNY Mellon). Clearing, brokerage custody or other related services may be provided by Pershing LLC, member FINRA, NYSE, SIPC. Pershing Advisor Solutions relies on its affiliate Pershing LLC to provide execution services. Bank custody and private banking solutions are provided by BNY Mellon, National Association (BNY Mellon, N.A.), member FDIC, a wholly owned subsidiary of The Bank of New York Mellon Corporation. Pershing LLC, Pershing Advisor Solutions LLC and BNY Mellon, N.A. Bank Custody Solutions do not provide investment advice. Affiliated investment advisory services, if offered, are provided by Lockwood Advisors, Inc. (Lockwood), a Pershing affiliate and an investment adviser registered in the United States under the Investment Advisers Act of 1940. For professional use only. Not intended for use by the general public. Trademark(s) belong to their respective owners.