Going independent has never been easy — but the process may look a little different than it did, say, at the beginning of last year.
The pandemic has ushered in an ultra-remote environment, complete with more Zoom calls, more e-signing and, inevitably, more stress.
Nevertheless, financial advisors haven’t stopped making drastic career changes and opening up their own RIAs.
“The reason we chose to go independent, do the extra work and walk away from all this extra money” is the same in or out of a pandemic, says Carmine Corino, an advisor whose four-person team left New York Life in May 2020 to open up Cornerstone Planning Group, a $209 million RIA based in Fairfield, New Jersey.
Indeed, the number of breakaway teams that custodian Fidelity Institutional has worked with has gone up by 15%, according to John Phillips, head of platform sales for Fidelity Institutional, which works with RIAs, broker-dealers, family offices and other intermediary firms.
Phillips and his team help brokers open up their own business on Fidelity’s platform. The teams they’ve been working with over the last year are significantly larger in size, double the assets than previously, he says.
Some of the bigger teams that were hesitant to work outside a large office have realized it wouldn’t be the impediment they originally thought, he says.
The challenges of the pandemic
But while moves may still be frequent, they have been particularly challenging for some due to events largely being at a standstill.
Melissa Brennan, an advisor who had to
“I would normally be networking,” says Brennan, who runs her practice with the ARS Private Wealth platform, a dually registered firm with LPL Financial in Houston, Texas.
To help meet new clients, Brennan has been calling up estate planning attorneys to introduce herself with an eye toward referrals. She’s also started hosting multi-week book clubs for individuals wanting to learn more about managing their money. She’s run two sessions on financial aid and how college is priced.
“That's driven a little bit of business,” she says. Brennan currently has seven clients and about $7.5 million in assets, she says.
The coronavirus pandemic has also added stress to what can already be emotional moves.
Back in May, when Corino and his team were leaving New York Life, the extent of the virus’s threat was even more uncertain.
“My anxiety compounded ten-fold,” Corino says, noting that it was already a big move for him to leave an organization where he’d spent his entire 17-year career. Corino started meditating more frequently and incorporated a five-mile daily run into his afternoons.
Silver linings of working from home
But transitioning itself was easier because of clients staying at home, according to Corino, who says that it was easier to get in touch with them.
“No one was on vacation. Everyone was working from home,” he says. “I think it went much smoother due to the conditions we had.”
At Fidelity, Zoom calls have made working with the advisors more personal. Phillips talks with RIAs beamed in from their kitchens, with kids and pets in the background.
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Corino says he had his best year to-date in 2020, with more net new assets than ever, despite not onboarding any new clients during the 5.5 months he focused on transitioning his business to the indie channel. Only two households of approximately 200 didn’t follow the team to Cornerstone.
It was the best decision he could have made, says Corino.
“I think there’s no better time to do it,” says Corino. “But don’t wait for the next pandemic to go independent.”
