The road to independence is undeniably long, but those who have traveled that path say it is worth the effort and preparation. For advisors who know they are not long for the wirehouse, or who wonder what life as an independent registered investment advisor (RIA) looks like, Margaret Dechant, partner and founder of 6 Meridian and Wes Kaufman, founding partner of Heartwood Wealth Advisors, sat down to share a few tips, stories, and anecdotes from their respective pursuits of independence.

About three years ago, Dechant went straight from a wirehouse to a fully-fledged standalone breakaway. Kaufman first chose to exit the wirehouse by tucking in with another firm before finally going independent in June 2019. Here are edited excerpts of their reflections from the other side

Q: What was your team’s morale immediately after breaking away?

Dechant: We didn’t keep the breakaway a secret from anyone on the team. We made sure everyone was aware well into the planning process and got everyone on board [with our plans]. They had grown weary with the wirehouse, so they were very excited about what that meant for them personally and for our business as well.

Kaufman: We were the first team from the office ever to go independent. A lot of people left to go to the wirehouses, but nobody ever left to go independent. I think there was a lot of respect and acknowledgment of the fact that we took a big step.

“We had to delay the rollout by a week because we didn't have phone numbers to give our clients to be able to call us.”
Wes Kaufman
Heartwood Wealth Advisors
Q: How did strategic partnerships assist you during the breakaway experience?

Dechant: [BNY Mellon’s Pershing] laid out a project timeline for client transition and business transition, and we had weekly calls. They kept us on track.

Kaufman: During our first transition, one of the things we had to do was engage a consultant. They helped us think through everything that we needed to do: find a space, get that built out, buy furniture and computers, name our company and [create] a little branding around that — all of those things.

Q: Tell us about some of the less-appealing bits of preparation you’re ultimately glad you handled as you did?

Kaufman: Get a business operating agreement that takes into account what happens if it doesn’t work out. If you’re talking about some partnership, there needs to be an operating agreement that says if three years down the road, we end up not liking each other and we want to split up, how does that happen?

Dechant: At the wirehouse, everyone fully grasped and realized the gravity of what would happen if we got kicked out — it would impede our ability to do what we want to do. It would impede our ability to pay our employees and it would impede our ability to service our clients. So, everyone understood the gravity of the situation and the importance of keeping it under wraps.

Q: Did anything pop up along the way that you wished you’d known more about?

Dechant: Technology. Make sure you fully understand how the technology connects, and how it works, because that was something we didn’t have a full appreciation for — how big the landscape was. We’ve made some changes in the last three years as a result of our initial misunderstanding of how it all fits together. Technology is a big piece of your client experience and your team experience as well.

Kaufman: Phones. We probably started six weeks ahead, getting the phone setup. When people break away, on a small team, there may be two or three people. On a big team, there may be 10 or 15. [Few] phone providers want that business. We had to delay the rollout by a week because we didn’t have phone numbers to give our clients to be able to call us.

Q: How has independence changed your team?

Kaufman: Everybody in this office is focused on doing things the Heartwood way. There’s also no guidance that may be counter to what we want to do for our clients and our business. It took me a lot to get to that. We are a team that’s all pulling in the same direction, and we don’t have those other competing interests or distractions anymore.

Dechant: What we’ve seen in our people is their ability to flourish in a different environment. The creative thinking that goes into our investment strategies, our wealth, planning, and our marketing, is even better than we thought it would be. And I don’t think that would be unique to us. I think if you ask any breakaway, they will tell you the same thing. So, life beyond the wall is truly brighter and full of opportunity.

Note: Responses have been edited for readability and spatial considerations.

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