Leaving a cushy job with the backing of a large firm can be daunting, but for many advisers it is a risk worth taking.

The most common concerns are the ability to convert clients and overall financial uncertainty. However, if advisers identify the clients who are most reachable and profitable, along with creating a differentiator to separate themselves from other firms and independent advisers, the overall goal of flying solo is attainable.

Here are three things to take into consideration when going independent.

1. Lone wolf or team of many? For advisers who have been in cahoots with a few others who want to break free, it is better to work as a team with people they know and trust, as opposed to taking on the tedious and time-consuming task of hiring unfamiliar partners and support staff. In addition, having pooled financial backing could give the business more runway, not to mention more clients from people with whom those advisers have built relationships. For those who do have a team of support, make sure to have partnership and compensation agreements settled to prevent disputes down the road.

2. Asset responsibility for first-timers. Assets under management define the business. It is important to find the magic number that is suitable for the size of the company, as well as the firm’s goals and strengths. Make sure to also understand the process of how much in assets is desired as well as the appropriate timeline for bringing them into your practice. People tend to get caught up in asset gathering, but identifying and targeting a stellar client service are cornerstones of successful businesses.
3. Technology is your friend. Over the past couple of years, investment technology has revolutionized the industry. Although these tech tools are handy and often available to consumers, most clients have peace of mind knowing that a person is keeping an eye on their investments, especially during periods of extreme volatility. With so many different digital tools, it is important to use them to advisers’ advantage to manage changes. It is also important to keep the firm’s tech stack simple and efficient when the firm starts out. The firm won’t have as many tech tools in the beginning, but it will have flexibility and can enhance tools as it gains more clients and experience in the independent realm.

Breaking out of the corporate world and starting a firm is possible for those who have a detailed plan, do their homework and find a differentiator from other firms and independent advisers. With targeted clientele and brand identity, along with the help of a team and technology, a firm can establish itself and begin generating revenue quickly.

This story is part of a 30-30 series on transitions.

Min Zhang

Min Zhang

Min Zhang, CFA, is CEO and co-founder of Totum Wealth.