To help advisors navigate the decision-making process and learn about the associated benefits, as well as address concerns of moving to an independent model, Fidelity created an Independence Hub, a central location for insights, tools, and practical steps to support advisors on their path to independence, including actionable guides for each phase of their journey—consideration, transition, and growth.
New research from Fidelity Investments shows that about 1 in 6 advisors have proactively switched firms in the past five years, with independent business models as the top destination.
In fact, 94% of advisors are happy with their decision to move, with 85% noting an increased control over their future. Despite this popularity, only half of advisors consider themselves knowledgeable about firm types (54%) and independent models (49%), and only 25% know the various intermediaries (e.g., 3rd party recruiters, consultants, clearing or custody providers) that can help with finding a firm. Advisors may prefer independence and the benefits associated, but the lack of knowledge and fear of the unknown may be preventing them from taking that leap.
“Arming advisors with the resources needed to help expand their breadth of knowledge has always been a priority,” said Rohit Mahna, Head of Client Growth at Fidelity Institutional Wealth Management Services. “Fidelity is committed to leveraging its deep expertise to not only help educate advisors and provide the tools needed to facilitate better outcomes, but be a true collaborator as advisors look to build their businesses.”
Fidelity recently welcomed Concurrent Advisors to its platform after their move to independence, transitioning 60+ advisor teams with more than 20,000 accounts in just three months, and continuing to grow at a compelling pace.
“Meeting advisors where they are and helping them achieve their vision is key to what we do, and in many ways, Fidelity did that for us,” said Nate Lenz, CEO and Co-Founder at Concurrent Advisors. “From operating on a broker-dealer platform and wanting to take the next step to becoming fiduciaries for our clients, Fidelity opened the menu of possibility in terms of solutions, technology, and growth opportunities.”
New Independence Hub
Fidelity drew from its deep experience of business development, practice management, technology, and investment consulting to develop a suite of resources to help guide advisors through the various stages of independence, inform their decision, and be better prepared, no matter the phase of their journey. All accessible through the new Independence Hub:
- RIA Valuation Tool, a new on-demand format, which helps advisors of all sizes understand their potential economics as they go independent, including increases in earnings and/or revenue compared to their current model. This online tool is a self-serve option for advisors who want a quick analysis, although those interested in deeper discussion can meet with Fidelity for a more thorough review of their business analytics.
- New thought leadership, Build Your Own Tech Stack One Step at a Time, which outlines a simplified approach for newly independent advisors to get the tech they need, when they need it, and evolve as they grow. As technology becomes more imperative to advisors’ businesses, help in navigating the process of building a new tech stack enables advisors to find their best fit from a position of strength.
Increased Growth and Job Satisfaction Among Independent Advisors
Eighty percent of movers reported asset under management (AUM) growth since switching, with a median increase of 42%. In fact, Cerulli projects that independent and hybrid RIA channels will have a higher AUM growth rate over 5- and 10-year periods. Contrary to popular belief, nearly all advisors (99%) said their clients were ultimately supportive of their decision to move, with over half (54%) noting they were immediately supportive.
GenTrust made their move to independence more than 10 years ago, leveraging Fidelity’s diverse capabilities to help expand and grow their business.
“GenTrust was founded with the goal of providing holistic, conflict-free advice for its clients and attracting other advisors who value the same,” said George Perez, Founding Principal at GenTrust. “With its focus on being a destination for other firms to pursue independence, Fidelity provides us the resources and platform to support our business’s changing needs, allowing us to deliver a high level of service to our clients. Clients are at the core of who we are, and Fidelity’s experienced professionals understand and appreciate the importance of delivering the service our clients deserve, always striving to put their interests first.”
Among the many factors influencing an advisor’s decision to move, the top considerations include: compensation (51%), better firm culture (50%), and the ability to provide a higher level of client service (39%). The most notable concerns are: fear of the unknown (60%), client attrition (48%), and time spent transitioning vs. managing the practice (35%). However, 39% reported that none of their initial concerns ended up being a significant issue, and 68% agree they should have made the move sooner.
The Wealth Alliance was founded in 2019, and chose Fidelity as a destination to help support their clients’ needs and growth journey.
“We pride ourselves in supplying customized approaches and solutions for our advisors to accommodate their unique needs, and Fidelity helps us achieve that,” said Robert Conzo, CEO and Managing Director at The Wealth Alliance. “We wanted more, our clients wanted more, and Fidelity’s agility and custom-made strategy empowers us to build a destination that allows like-minded advisors to do the same for their clients.”
