The Challenge of Being Independent – And What to Do About It
I get to sit in one of the best seats in our profession. My job is to support the financial advisors who decide to work with First Ascent. What that “support” looks like varies widely, from coaching on how to explain our portfolios to clients, to answering nitty gritty questions, to acting as a sounding board of sorts. You, the advisors, share with me all kinds of details about the innerworkings of your practices and the challenges you face every day. I consider that a privilege, and I do not take my role lightly!
Those of you who are totally independent – first, bravo. Kudos for taking that bold step. I know it often feels scary. I know it involves a considerable amount of risk. I know most (if not all) of you have done it primarily because you believe it will allow you to serve your clients in the very best way.
Nothing in this world is perfect. No business model, no fee structure, no solution. Probably THE biggest challenge I see independent RIAs face is analysis paralysis. If ALL of the options in the financial services universe are available to you, how on earth are you expected to sort through all of them and choose “the best” tools and resources to “best” serve your clients, as a fiduciary?! What an overwhelming and daunting responsibility!
I have seen this dilemma time and time again. An advisor starts down a path toward a financial planning software. The demo looks great. Other advisors who use it love it. All the boxes seem to check. “But then.” The advisor finds the gap, the downside, the one (or two or three) things the software cannot do, or does not do well. And suddenly, the advisor worries if this is REALLY the best software to serve clients. What if that one problem causes a problem for the clients?
I have watched a lot of you get stuck in indecision and angst over decisions around your business. That is the universally most common downfall I see with independent RIAs. So, if you asked me what would I suggest, here’s what I would say: 1) change your perspective, 2) create a thoughtful and deliberate strategy, 3) execute.
Changing Your Perspective
Theodore Roosevelt said, “In any moment of decision, the best thing you can do is the right thing, the next best thing is the wrong thing, and the worst thing you can do is nothing.” I would encourage you to reframe “right” and “wrong.” Wrong would be if you grossly neglect a vital component of your client’s situation when recommending something to them. Wrong would be if you purposefully act unethically. But, there is no one “right” piece of technology. The “right” thing in the context of your practice is what solution you believe to work well given the information you have today.
The other way I would suggest changing your perspective is by not taking the last part of the quote above lightly. Your indecision and inaction can be just as harmful as your fear of picking the “wrong” solution. Moving forward, in some direction, will most likely benefit your business and your clients (assuming you adopt my second suggestion).
Creating a Thoughtful and Deliberate Strategy
If you agree that taking action and moving forward is important, you might still be wondering how you actually do that. Let’s dissect three words from my second suggestion. Being thoughtful means that you have put time into considering options, alternatives, and tradeoffs. Being deliberate means that you CHOOSE, with intention, which tradeoffs you believe are acceptable given the perceived benefits of the selection. And strategy means that you have a plan, a method, and a series of steps you will take.
What does this look like in practice? You could start by setting up demos, talking with friends in the profession, researching functionality and integrations, reading articles and reviews. Then you could take all of the data you have gathered, synthesize and analyze it. Finally, make a decision.
The timeframe for this process– whether it be initially for setting up your entire practice, or at some point in time when you want to add another offering or service – will take some of you hours, some of you days, and some of you weeks…maybe even months. That is fine. It is more important to give yourself leeway (I call it grace and space) to process information at a pace that works for you, than to try to force an arbitrary timeline onto yourself. The important thing is to know that you are in a process that will have an end point: a decision. Find the balance – give yourself enough time, and also envision the conclusion of the decision-making process.
Execute
If you are like me, this is the best part. The satisfaction that comes from getting stuff done propels me forward in my work. If you are not like that, it can be harder to get to this place. Highly analytical people can get stuck in my second suggestion. Rightfully so. In no way do I intend to minimize the importance of the decisions you make for your practice or the potentially overwhelming nature of making them. But keep in mind, very few decisions are irreversible. Yes, changing vendors is a lot of work. It takes time, effort, and expense. But it is possible. I see advisors do it all the time! Hopefully, keeping that in mind can reduce the anxiety you might feel about the selections you make based on the information you have today. You can alter course, if and when you have even more information that allows you to make a different decision.
Some of you may be afraid of what your clients might think if and when you make changes. You fear that they might question your judgment, your consistency, fill-in-the-blank. That is valid, on some level. But, your clients didn’t hire you to perfectly put all puzzle pieces in place on day one. They have hired you for advice, for coaching, for help. Unless you are project-based, your value-add and service offering should be evolving. It shouldn’t be static. As you and your offering evolve, so should the pieces you have in place to make that possible. You can confidently own that.
You provide tremendous value to your clients – keep your focus on that, and don’t let yourself get bogged down in the mechanics. Yes, they’re important. But you can keep moving forward as you figure out the details. There will always be room for course corrections. Go serve your clients!