4 Biggest Challenges of Independence

Dec 14, 2022 4 min read

Setting out on your own is an exciting proposition, but it is essential to know what you are getting into before you take the leap. Independence brings tremendous advantages and opportunities for advisors — freedom to operate your business how you want, more options on how you service and more control over your work environment. It enables you to deliver to your client’s specific investment needs so that they feel secure about their relationship with you and know that their money is going exactly where they want it to.

However, with this freedom comes more responsibility. As an independent, in addition to being an advisor, you are now also a business owner and this comes with its set of challenges.

1. From Top-Line Growth to Bottom-Line Results

For most of your career, you have measured yourself on revenue growth and sales. As a business owner, building equity in your biggest investment will become more important. This transition from a sales-only focus to an equity and bottom-line focus is often the biggest change in mindset for an independent advisor.

Successful equity growth starts with a clear vision of your business goals. You must ensure that you align your vision and goals with the costs and values of your clients. This means spending more time working on the business than in the business and making trade-offs that impact your P&L on factors like rent, payroll, marketing and other investments. Defining and understanding your key success metrics beyond the revenue line will become more important — but with the right plan and tracking, you can progress toward your goals.

Making sizeable upfront investments can be scary at first, but in the long run, you will have the opportunity to create significant equity value in your business.

2. Legal and Compliance

Compliance is essential for the continued success and growth of an independent financial advisory firm. While the broad range of policies and compliance requirements may seem overwhelming at first, having proper processes in place can help streamline operations and protect the interest of your clients and business in the long run.

As an advisor, you are responsible for managing risk within your business. Devising policies and procedures that align with your vision can simplify compliance. A robust framework of policies will ensure that your clients’ investments are handled properly and that their interests are always put first.

Compliance also ensures the protection of your firm. By following the rules and regulations, you avoid costly fines, penalties, legal issues and other potential problems that can damage your reputation.

As the leader of your business, staying up-to-date with regulatory bodies, and understanding new policies and guidelines is crucial for holding your firm to a high legal standard and compliance should be something that you are revisiting and improving constantly.

3. Technology & Operations

The slow pace of technology development or the application of tools that don’t fit the specifics of your individual practice is something we often hear from advisors looking for a change. Moving out on your own does not guarantee an improvement, but if you explore and integrate the right technology, it can make a huge impact on the productivity of your business. Digital advances such as reduced paperwork, automation and improved reporting can improve both the advisor and client experience and help you grow when applied correctly. However, it is imperative that you take the time and energy to get it right.

Understanding the most indispensable software tools; CRM, client databases, financial planning, Portfolio Management and reporting, and how they work together are critical decisions. Furthermore, making sure that the tools work well with your custodian is another key piece of the puzzle to be solved.

Marketing tools such as social media automation, website, and search engine optimization are becoming increasingly important to advisor growth. Deciding how you will align specific technologies like these with your business processes can influence your success more than you may realize.

The wrong technology strategy can complicate your business and lead you down a rabbit hole of changes. The most important thing is to do your research to ensure that the tools and platform you invest in meet your unique needs. You should also explore the integration capabilities of these technologies — how they interact with one another can play a large part in how they affect the efficiency of your business. Figure out what your technical requirements are and what you’re willing to compromise on.

4. Managing Your Team

As an advisor you may have experience leading a small team, but as an independent business owner you will have to manage team members with broader sets of responsibilities, not just for a unit, but for your entire business. You are handcrafting your work environment — you get to decide what kind of people you want working for you, and how they will contribute to your office culture. For most advisors, creating the right culture and keeping top talent is the most important factor in their success.

You can also find your own way to motivate your team and encourage them to actively uphold company values. This could be compensation but also includes other methods like company events that foster a sense of community in the office. No matter which style you use, if your employees enjoy their job and are excited to come to work every day, they will be far more productive.

For many, these questions will bring a welcome new challenge, for others, it provides a reason to pause and find a solution with greater levels of support. We are interested in having a discussion and doing the discovery to help you find the path that best meets your needs. We want to ensure that the platform you select meets your requirements so that you can do what you do best: advising clients on their financial lives.

If you have questions or want more information, go to www.purposeadvisorsolutions.com.

Success stories


Adopting Purpose's tech platform was like jumping 20 years into the future. This partnership has been a game-changer for us especially since we started from scratch. We're now able to accelerate our growth at a much faster pace than we ever could have on our own.



President & CEO @ Origin Wealth