There is a sharp distinction in mindset between being an advisor and an independent financial advisor. As a financial advisor, you are a part of a larger firm and your main focus is your clients and growing revenue. Day-to-day business operations, budgeting, and marketing do not fall in your scope of responsibility and really only enter your radar screen when they impact your ability to manage your client assets. This all changes when you become an independent financial advisor. Every business detail, even as minute as what business supplies to order, is now under your purview. As an independent advisor every aspect of the business is yours to own and manage. In navigating this difference between being a financial advisor and being an independent financial advisor, mindset becomes key in assuring your present and future success.
The first essential to achieving the right mindset as an independent financial advisor is understanding that you are no longer just an advisor, you are an entrepreneur. I explore this subject in a recent episode of my podcast series, ‘The Financial Advisor’s Advisor’, entitled “Independent Mindset. Running your own business is entirely different than being an employee of a business and running a business is exactly what you will be doing as an independent financial advisor. This means expanding your skill set to include an understanding of operations management, budgeting, marketing, and the multitude of practicalities of business ownership. These skills are ones that can be inherent to you now or ones that you are committed to learning. Understanding that, as an entrepreneur, you will need to do whatever it takes to learn them; however, is an imperative.
Another vital component of a successful independent financial advisor mindset is your ability to embrace the chaos. The financial services industry can sometimes feel like a bit of a roller coaster ride. Any given day, as an independent financial advisor, you may need to confront issues related to compliance, adjustments to products and services you offer, regulatory changes, customer care and service issues, and human resources and staff concerns – among many others. Your ability to think quickly on your feet and mentally compartmentalize one issue from the next is vital as you navigate the ever shifting landscape that is financial services today.
Most importantly of all, as an independent financial advisor you will need to know exactly who you are – as a business and as a professional – and be able to clearly and succinctly express that vision to the world, a topic which I discuss in my podcast series episode “What’s In A Name”. This can be achieved by clearly defining your firm brand, product and service offerings, and target client base. Clients and industry peers want to do business with a firm with vision. Clarifying that vision from the outset and developing, from there, your firm road map for present and future growth is an imperative that every independent financial advisor must face.
The independent sector is the most rapidly growing in financial services for a reason – it offers the most flexibility to an advisor, both operationally and in terms of the advisor-client relationship. Additionally, the financial upside of that flexibility can be immeasurable – something many an advisor today is taking note of. Understanding what becoming independent means; however, is an essential every advisor must face if considering making this move. The rewards of independence are great if the right mindset – and right skill set – are put to use by an the independent advisor in order to reap them.
