It’s important to understand your options when considering the move into independent wealth management.
You might be moving away from a bank, brokerage, mutual fund, or insurance company, and you know you want to be independent. But what does that look like for you? Maybe you want to be wholly independent and out on your own. Or perhaps you’re interested in joining a small, established investment firm like the one I work for.
Whatever your personal path to independence, what factors should you take into account? I’ve been in the independent investing space for nearly 30 years and here are three things I think you need to consider when contemplating going independent.
1. Decide what your focus will be and stick to it
This is your first decision and, in many ways, your most important. Everything else you will do as an independent provider is rooted in this choice.
For our firm, The RaeLipskie Partnership, when our founders started the company, they chose client care and client service as our focus, and that has remained our touchstone since 1989. That original principle guides everything we do, and it's a foundation we can always return to in helping our decision-making.
We take our fiduciary responsibility seriously, so every decision we make is informed by the question, "What is best for the client?" We listen to the needs and goals of our clients and design flexible, custom portfolios to suit their investment objectives. Having client care and service as our goal provides the guidance and discipline to identify and stick with the asset mix appropriate for that client and ensure the client portfolio is invested and rebalanced as needed to meet those objectives.
Dedication to client service also led us to focus on clean, easy, simple reporting so that clients always understand their investments. Because we're a smaller firm, we have the freedom to be creative in how we provide information to our clients. So, we were early adopters of portfolio management software and developed some add-on reporting to communicate a clear snapshot of holdings to clients. Clients get a comprehensive look at the structure of their investments, how their portfolio matches their overall goals, and how the client is doing compared to the market.
It was years before the security commissions changed their rules and required these sorts of comparisons. But we'd been doing them virtually from the start because we thought from the perspective of what the client would want to see.
All of this springs from the initial decision to focus on client care and service.
2. Build your procedures and invest in compliance
In moving from a banking environment to the independent wealth management space, you have to think about procedures and compliance. The good news is that not only are setting up effective processes crucial to your success as an independent advisor, but that there are partners like NBIN ready to support you.
Admin staff can be lifesavers. When you’re starting out, hiring the right people with the right skills will help you set up your office and procedures correctly from the outset and then maintain them.
At The RaeLipskie Partnership, our admin staff was instrumental in developing checklists and step-by-step procedure documents to ensure everyone knows what they must do and that crucial steps aren’t missed. Likewise, we ensure that staff are trained on the proper procedures so that our internal and external dealings run smoothly.
Compliance is also huge within this industry, so invest in compliance upfront. Setting up structures the right way the first time will ensure you are doing the right thing for the client.
As an independent wealth advisor, you are not alone dealing with compliance requirements. Custodians like NBIN help our firm understand compliance structures and what’s needed to serve clients effectively. Whether you’re on your own or part of an independent investment firm like ours, remember that you have industry partners like NBIN to help you.
At The RaeLipskie Partnership, we lean on the Portfolio Management Association of Canada (PMAC) as one of the more than 300 investment management firms that participate in and benefit from PMAC’s advocacy, business services, and forum, to share best practices and industry knowledge. We also use a compliance law firm to help support us. They provide us with guidance and a complete compliance roadmap.
3. Hire strong committed people and develop effective relationships with partners
I touched on this a little when I mentioned admin staff, but hiring solid, capable people who are very committed will make your life easier and your work more enjoyable.
We have people on staff who are exceptional at investments and portfolio management. We have those who are skilled at procedures and compliance. And we have people who are great at communicating and building relationships with clients. You need a mix like that in your team to be as effective and successful as possible.
The key is hiring people who will work and communicate together well. Hard skills like math, compliance, using various programs, and how to generate a report, are skills you can teach. But the energy and commitment to the work—that comes from inside.
Having capable, committed staff starts at the top—and it certainly does in our office. Our President and COO, Brian Lipskie, was recently recognized for his talents, ranking #13 of 150 in the Globe and Mail’s Canada’s Top Wealth Advisors 2021.
You need passionate people who like coming to work every day. It makes the work a lot more enjoyable. There are 27 people in our firm, and most of us have been here a long time because we love the work and the people we work with. And it’s always wonderful to welcome fresh new talent and see them stay for the long term.
As part of our 2008 rebranding, we changed our trade name to ‘The RaeLipskie Partnership.’ This is not because we are a structured partnership. Rather, it reflects how deeply we believe in partnering with our clients, our staff, vendors, custodians, pooled fund providers, and our local community.
We have a niche section of clients we manage portfolios for in the charitable and not-for-profit sector. We provide these clients with a 25% charitable rebate on their management fees and support them in their fundraising efforts and events. We also believe in supporting all our clients’ philanthropic interests if we can. It’s fun to participate in the community events and give back. It’s a win-win and just the right thing to do.
We hope whether you’ve thought about becoming an independent advisor, joining an established independent firm, or if you’re currently starting an independent firm, that you were inspired by Sheila’s insights and the three tips she’s offered.
To learn more about her experience working for an independent investment firm, reach out to her at email@example.com for details.
And if you’re interested in going independent, contact NBIN today to learn more about the next steps.