bcmmin Finance Blog

Men and women who are looking for financial and investment advice often turn to brokers and financial advisors who are educated and skilled in investments. While companies are available who offer services for their clients, more financial advisors are breaking away from company employment and offering independent services.

The Trend:

While the trend to go independent has slowed slightly during 2011, it is still a growing trend that has an impact on many consumers and investors. The gradual growth of independent advisors has made it possible for consumers to choose the type of broker who fits personal needs best.

The trend is slowly moving toward more independent brokers or brokerage teams who are managing client money. Companies are seeing more brokers move away from the business and start working on an independent level with client income.

Reasons for Breaking Away:

As more brokers break away from the companies, the inevitable question of why they choose to provide independent services arises. The problem with determining the reasons for the growing trend is that in some cases it is a matter of speculation.

Despite the fact that not all individuals or teams will have the same reasons, the trend has seen a spike in turning toward independent services. One major reason is the likely increase in knowledge about the possibilities. More brokers are learning that it is possible to break away from the company and offer services independently.

Beyond the gradually increasing knowledge, the potential to make more income through signing bonuses can motivate large teams or brokers to break away from the original company. An independent financial advisor who has a large client base is often offered a large signing bonus from other companies to work under the name of the brokerage firm as an independent advisor. This monetary motivation can help the growing trend to become independent, particularly when it relates to large teams or individuals who have large client accounts.

Monetary motivation and increasing knowledge about the possibilities are not the only reasons that brokers are becoming independent. In some situations, an entrepreneurial spirit is the major motivating factor involved in the decision. A broker or brokerage team might break from a company due to the desire to start a new business. While this motivating factor is a large risk, it is also rewarding to some brokers.

Creativity in New Business:

Brokers who are turning toward independent services are not only becoming independent advisors under large businesses. In many cases, the goal is creating a new business that allows more flexibility in investment or meets particular needs of families or client assets based on particular needs.

The entrepreneurial spirit is a key part of the growing trend to turn toward independent services. It allows brokers more creativity to meet client needs. The ability to create new investment avenues and services makes it ideal when working around a niche group of potential clients.

Creativity includes providing a wide range of team services, such as tax and investment services in the same company, or working with a particular type of client rather than the general population. By creating a new business, the brokers are allowed to come up with new strategies that are not possible in larger firms.

Independent brokers can talk to clients about investments or services that are not always available through large brokerage firms. For example, buying products for oil companies when families are tied to the oil industry. Depending on the firm, the ability to get creative in investments and growth will result in the formation of better services.

Going independent is useful for many brokers who are ready to break away from the large firms and start a new company. The continued growth of independent brokers has resulted in more services that meet client needs and a wide range of new options for investors. Independent brokers have more freedom to create new strategies that are not implemented in larger firms. The ability to use more creativity combined with monetary gains and the freedom from set structures makes going independent a tempting option for brokers or brokerage teams. More brokers are turning to independent services and are seeing benefits that help clients, investors and the personal desires of the broker.

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