Three Early Decisions That Can Shape an Independent Advisory Firm

Going independent can give financial advisers more control over how they serve clients, but the move also makes them responsible for building the business infrastructure that a larger firm once supplied. The first year can set patterns that last, so preparation around client communications, departure terms and operations matters as much as the decision to leave.

The shift has been steady: Over the past decade, adviser headcount at independent RIA firms grew at a compound annual rate of 5.2%, according to Cerulli, while other channels stayed flat or shrank. In Betterment's 2024 Advisor Survey, 59% of advisers who went independent cited business freedom as their leading reason. Personal freedom followed at 51%, access to better technology at 44% and earning potential at 43%.

Those priorities explain the appeal, but they don’t erase the workload. A new firm needs a name and a way to reach clients, technology and workflows, paperwork and a plan for moving accounts. Advisers also have to keep serving clients while making decisions that can affect the business for years. Three preventable missteps can make that transition harder.

1. Leaving before reviewing your obligations

It’s tempting to put all your attention on the new firm and treat the departure as a formality. That can create problems. Employment agreements, noncompete and non-solicit terms, and broker protocol status can affect what an adviser may do when leaving and how the transition proceeds. The details depend on the documents and circumstances, so assumptions can be costly.

Before setting a resignation date, ask an attorney to review your employment agreement, noncompete and non-solicit terms, along with any relevant broker protocol status. A compliance consultant may also help you identify launch requirements and avoid preventable delays or fines.

Keep the resignation letter short and professional. The source advises waiting until after you have formally resigned to tell clients about your plans. That timing can feel difficult when you have long-standing relationships, but it gives you a clearer sequence for handling the departure and client outreach. Get qualified advice on your own situation before acting.

2. Treating client conversations as an afterthought

Advisers understand why they want independence; clients need to know what it means for their accounts and day-to-day service. Anxiety can push advisers toward opposite mistakes: speaking without a plan or trying to script every detail so tightly that the conversation feels unnatural.

Start with the client’s experience. Explain the practical reasons for the move, such as the service you intend to provide, the technology you plan to use, transparent fees or a fiduciary commitment. Describe what is known, and be candid about steps or timing that are still being worked out.

Prepare clear answers to the questions clients are likely to raise: Why are you leaving? How will accounts transfer? Will investments change? How long could the process take? The answers should match the client’s circumstances and avoid promises about timing or outcomes you can’t control.

Choose a format that suits each relationship, whether that’s an email, a phone call or a face-to-face meeting. A concise written explanation can help clients revisit the details, while a conversation gives them room to raise concerns. The point is to make the change understandable and keep communication steady as the transition progresses.

3. Assuming you can do every job yourself

A new practice requires advisers to coordinate technology, workflows, forms, account transfers and client updates at the same time. Handling every piece personally can drain time from client work and leave the firm with disconnected tools. InvestmentNews reports that more than half of advisers already cite technology integration as their biggest technology pain point.

Evaluate the custodian as an operating partner, not simply a place to hold assets. Depending on the arrangement, transition help may include a dedicated team, communication templates, digital onboarding, automated account transfers and tools that show where each client stands. Ask who will guide the transition, how long it may take, what support continues after launch and whether any services are limited to larger firms.

Those questions help turn a broad promise of support into a concrete picture of who does what. They also make it easier to spot gaps before a launch becomes busy. The level of human and technology assistance can shape how demanding the first year feels, so compare available help against the tasks your practice will need to complete.

Build support around the work

Independence gives advisers room to shape a firm around their clients, but autonomy doesn’t mean every decision belongs on one person’s desk. Legal counsel, tax advisers, compliance experts, experienced peers and a responsive custodian can each help with a different part of the move. Together, they can leave the adviser more time to focus on client service.

The transition still takes planning and stamina. A careful review before resigning, client conversations built around practical concerns and a clear plan for operational support can make the first year more manageable. For advisers weighing the move, the useful question is not only what independence offers, but which people and systems will help turn that promise into a workable practice.

Related reading

• From Vision to Value: A Blueprint for Helping to Build Your Advisory Practice
• How Advisers Can Strengthen Their Client Relationships: These Small Changes Can Have a Powerful Impact
• Your Next Growth Opportunity as a Financial Adviser May Already Be a Client
• Savvy Marketing Tips for Financial Pros From a Financial Pro
• How Client Segmentation Can Help Your Advisory Boost Profitability

This article presents the views of its contributing adviser, not Kiplinger’s editorial staff. Adviser records can be checked with the SEC or FINRA.