Are You Willing to Pay and Manage More to be TRULY Independent?

Are You Willing to Pay and Manage More to be TRULY Independent?

The strive to be an independent financial advisory firm comes riddled with ironies in the wealth management industry.

I question what “independence” means when advisory firms are required to use their institution’s technology to enter tasks assigned the institution’s staff, have documents e-signed, or respond to alerts and notices. And how much labor (money) is spent tracking the progress of tasks you have assigned to that institution in their software?

We understand completely why Broker Dealers, custodians, and outsourcers are requiring firms to use their own technology – it is about compliance. It is also about profitability and reducing labor costs. The more you use the institution’s systems, the less work their staff has to do AND less need for their managers to oversee their work. Less work equates to less labor cost.

So what if an advisory firm was offered two choices regarding technology:

Choice 1: Pay for your own software and pay the institution more money. The extra fees will pay the institution’s compliance team to review documents and service team to manually enter requests into their technology to then process.

Choice 2: Use the institution’s technology and pay them less for servicing and reduce your expenses.

or Staffing:

Choice 1: Pay more to the institution to use their staff while having less control over the pace of progress and quality of servicing.

Choice 2: Pay less to the institution and more to your own staff to enter tasks and service the clients. You will have more control over the pace of progress and quality of servicing. You will also spend more time managing staff and less time on business development.

If you still can’t choose, pretend you are a client of your firm and choose:

Choice 1: Pay more for financial planning because your advisory firm has to manually collect and enter data into the financial planning tool

Choice 2: Pay less for financial planning and self-enter bank account credentials or values, mortgage balance, credit card balance, etc into your planning or data collection software


Choice 1: Pay more for the advisor to email or mail the investment report and communications

Choice 2: Pay less and view investment performance reports and messages in the advisor’s online portal

How do ya like them apples?

As you consider your own passion for being TRULY independent, you might want to consider what level of independence you want. And what is the impact of this decision on your business?

If this is too much for you to think about, please feel free to distract yourself with a short clip from Good Will Hunting’s “how do ya like them apples” and forget about this mind numbing blog post on determining you and your client’s independence.

Jennifer Goldman
Operational Excellence
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Jennifer Goldman is founder of My Virtual COO and comes to us with 20 years' experience optimizing the use of tech and people to improve RIA firms' productivity and profitabil ... Click for full bio

Most Read IRIS Articles of the Week (February 13-17)

Most Read IRIS Articles of the Week (February 13-17)

Here’s a look at the Top 11 Most Viewed Articles of the Week on, February 6-10, 2017 

Click the headline to read the full article.


1. The Real Reason Why Clients Choose You

Some advisors say they want to stand out from the crowd—but they’re fibbing. They really want to look and sound like everybody else. — Megan Carpenter

2. To Calm Client Fears About International Stocks, Speak Their Language

Market volatility is normal. And though we can’t predict the future, volatility in the coming years is a safe bet. Clients look to you, their advisor, to build investment portfolios that can help them navigate through unstable times. — Chris Shuba

3. Four Life Stages of an Advice Business

When I was much younger, I used to sail boats up in Gosford. They were called Sabots, small, snub-nosed craft which at first I sailed with another kid, then later on my own. — Stewart Bell

4. What's Wrong With Earning a Commission From the Sale of a Financial Product?

What's wrong with earning a commission from the sale of a financial product? Nothing. It isn’t any more inappropriate than a car salesperson earning a commission when you buy a vehicle. — Rick Kahler

5. Introducing a Low-Volatility Factor to High-Yield Fixed Income

For your clients seeking income, today’s environment is a tricky one.Interest rates are climbing, fixed-income yields are still low, and equities are at higher levels than they’ve ever been. — Salvatore Bruno

6. Why You Should Forget Social Media ROI...

While I am a fan of “measuring to manage well”, some things just can’t be measured accurately. That’s why I believe we should forget what the ROI of social media is, in the conventional sense. — Tony Vidler

7. Heads Down, Mouths Shut: The Distracted Generation

To say there is a lot going on in the world right now is probably an understatement. The current events of the moment are so cumbersome and so complex that for many it has become emotionally and physically taxing. — Janine Truitt​​​​​​​

8. 7 Random Acts of Kindness for Financial Advisers

I’ve spoken before about random acts of kindness; the unexpected things that you can do for a client and today, I would like to share seven of these with you. — Rachel Staggs

9. How Are You Answering Clients’ Biggest Question?

No matter what they verbalize, new clients’ biggest question is always, “Can I trust you?” — Paul Kingsman

10. An Open Letter to Advisory Firms Losing the Millennial Marketing Battle

Dear Adviser, I’ve spent my whole life as a millennial, or at least as long as the generational classification has existed, but you haven’t seemed to notice. Your ads and your marketing materials prove you don’t understand me. — Alex Nye

11. A Millennial Responds to Simon Sinek's Response on Millennials

Have you seen Simon Sinek’s response to the “Millennial question” on Inside Quest? As with any viral video, there have been a great number of reactions to it. — Nicole Anglace​​​​​​​

Douglas Heikkinen
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IRIS Founder and Producer of Perspective—a personal look at the industry, and notables who share what they’ve learned, regretted, won, lost and what continues to ... Click for full bio