Break Away From The Pack

The complexity of the current financial market and your breakaway options

On Behalf of | Sep 13, 2023 | RIA Formation |

Many financial advisors dream of a breakaway. They work for major firms, but they know that they would rather run their own. They would prefer to have fewer clients and to be fully in charge themselves, which can sometimes make each account vastly more lucrative. Some advisors even have a client portfolio that they believe they can take with them during such a transition.

But the financial market is very complex, and there are a lot of different factors that need to be considered. Any of the following reasons could impact the calculus undertaken by advisers like yourself who are considering whether they should set out on their own.

Stability or success

Oftentimes, the major question is whether a financial advisor is looking for stability or their own financial success. For example, if you feel like the financial market is a bit uncertain, working with a firm can give you more stability. A downturn in the market can be weathered by a major firm in a way that a smaller firm may not be able to replicate.

However, if the economy is doing well, then you might think that starting your own firm gives you a chance to earn more. Perhaps you are tired of feeling like all of your work is earning another’s firm money, and you want to capitalize on your labor. Maybe you just want the flexibility that comes along with running a firm yourself.

What does the market look like today?

The economic environment in the United States right now is not firmly on one side or the other. That’s partially what makes it important for advisors to carefully consider all of their options and think through the details when deciding how to proceed. For example, corporations have recently posted record profits. The stock market has made huge gains. But at the same time, inflation is increasing in a way it hasn’t for four decades. This is cutting into some of those financial gains and calling into question what each company’s profits actually mean.

This has happened against the backdrop of the “great resignation.” Many professionals have begun reevaluating their careers and determining what they really want out of their lives. As a financial advisor yourself, this turn of events may apply to you just like someone in any other industry. If you believe it’s time to take this next step and start your own firm, it’s important to know about all of your legal options as you evaluate your options.