Finding the Right Path: Why Going Solo Isn’t Always the Right Answer

By Ryan Derousseau

Hanging up one’s own banner as a financial planner has not only become a rite of passage but almost an expectation. There’s value, however, in numbers as you begin to build your client base.

As a career changer, that potential to hang up my own banner had a strong appeal to me because it would open up an opportunity to build as I wanted. I always planned to launch as an independent shop. However, that all changed after a meeting with Gerry Barrasso, founder of United Financial Planning Group. 

I met with Barrasso as I awaited confirmation on my CFP^® certification, having been introduced by my father-in-law, who is one of his clients. I asked about getting started as an RIA, and Barrasso made it clear he didn’t have room to add another full-time planner at the time. That was fine; it wasn’t my goal.

But during the chat, I asked, out of curiosity, whether many independent firms work with planners in an IRS Form 1099 capacity—as independent contractors rather than as employees. In other words, does the firm ever provide compliance and technology needs while the planner builds the client base? Remember, I was new.

Barrasso hadn’t considered it, and the conversation quickly shifted to what such an arrangement would look like. In essence, I unexpectedly talked my way into potentially joining United as an independent advisor.

At first, I hesitated. I had already begun the process of building a website and taking the initial steps to price out registration and compliance. But I also knew, as I started from scratch from a client perspective, that the startup costs could sink me faster than I budgeted. Just like sometimes with clients, I had to adjust my plan. The ability to gain compliance and technology tools through United was just too good to pass up.

The experience, however, has provided other benefits, some I didn’t expect I would need.

The Power of Knowledge

When shifting to financial planning, I had a specific ideal client in mind. They would be at a defined point in time in their career or self-employment journey, have a certain level of assets, and need very clear guidance. In essence, the client would be a carbon copy of myself and my own family’s needs.

Of course, now working in the space for nearly a year, landing a handful of clients whom I work with on a retainer basis, I know that you rarely experience such a case. I’m responding to new needs daily, depending on where the client is and what they hope to accomplish. This requires managing that fine balance between the art and science of financial planning to ensure I’m providing the right solutions.

In the beginning, though, it’s impossible to have all the solutions, whether you work within a group or on your own. But there’s value in leaning on the 40-plus years of experience that the group I work with has in managing clients’ finances and plans. This provided a layer of support and confidence as I began interacting with prospects and clients because I could find an answer from other experts right across the hall. It’s a value that I wouldn’t have found outside of online forums and working groups if I had gone independent right from the start.

When considering the independent contractor route, though, make sure you have access to the expertise. Some groups may not allow such informal interactions with firm leaders. For me, I can hop into Barrasso’s office anytime I want and ask a question. That access helps me and my clients.

Room to Find a Niche

When I began practicing, I thought for sure my focus would be self-employment—that’s where I had expertise and a base of knowledge that I could market. But it became clear early in the process that I needed to further narrow my niche.

While I continue to home in on the self-employed, I’ve found a real connection with private-practice therapists. This has given me the ability to speak directly to a large group of people through various outlets. In the process, I’m becoming trusted within the profession.

I’m confident that, given enough time, I would have become such a resource within a niche with or without United. But the banner gave me more immediate credibility, increasing the speed at which I could be quoted in articles, appear on podcasts, and host webinars. Plus, although I work with clients on a retainer basis, I am able to provide investment management through the relationship with United. My relationship with United reduces the restrictions I have on services, allowing my clients the chance to use the service that’s best for them.

This has resulted in more prospects and clients at a faster rate than under my own banner. If your niche isn’t fully defined, leaning on a banner can give you time to recognize where your expertise meets a need.

It Gives Me Options

Like many of you who launched your own firm, I’ve learned there’s a lot of minutiae that you must deal with, whether it’s adapting to a compliance demand, reacting to technology expectations, or even building a client process. Thanks to United, while managing my business I don’t have to dig into the nitty-gritty, other than to ensure a seamless experience for clients.

This gives me more time to focus on marketing and other aspects of building my presence as a financial advisor—which takes up a substantial amount of my day. But it’s also not something that handcuffs me forever, nor would United want that. When evaluating such a relationship, make sure to understand the expectations around clients.

In our case, we have a noncompete clause. I cannot take United clients, and they cannot take mine. If, in the future, I decide I want to build that RIA, I can act without risking the loss of my entire client base. There’s value in knowing such flexibility exists.

There’s a funny thing about the flexibility and experience, however: It reduces the desire to stand on my own as I build. Meanwhile, my enjoyment of the group dynamic grows, especially as my business takes shape.

It’s not the path I envisioned, but it was the right one for me.

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Ryan Derousseau is a Fee-Only Certified Financial Planner™ at United Financial Planning Group. He specializes in working with therapists, enabling them to thrive financially while they focus on their clients. You can find more of his thoughts at ThinkingCapFinancial.com.

image credit: istock.com/Irina Shatilova