Personal Finance

Post-DOL World: "Am I Too Old to Go Independent?"

As advisors age, many assume that the options for their business life are dwindling. That couldn't be further from the truth.

"Am I too old to go independent?" If I had a nickel for every time I was asked this very question, I could retire just on those nickels alone. Certainly, none of us are getting any younger, and no one wants to make their life more challenging as they edge closer to what could be the cusp of their career.

Yet, as the industry landscape continues to evolve and traditional brokerage firms become more bureaucratic (especially in a post-DOL world), independence has become the destination of choice for many high quality folks, no matter their age, amount of AUM, or type of business. While many seasoned advisors entertain the thought of an environment where they can have greater freedom, flexibility and control over their business, they are also bothered by the thought that it may be "too late" for them to chase that dream.

So how does someone determine if he is "too old" to make independence work? It really comes down to a few key characteristics shared by those advisors who took the leap:

They really wanted it. They really believed in their ability to migrate clients and grow. They had at least a 5-7 year time horizon left to work so that they could make up for the money left on the table (by not taking a transition deal from another traditional firm or leveraging their own firm's sunset program). They had strong next-gen talent. They were "long-term greedy".

It's not really an "age-thing"

Last year I had the opportunity to work with a father-daughter team - he in his early 70s, she in her mid 30s - who were looking to breakaway and create their own firm. They had reached a point where they felt they could better serve their clients and business by going independent. Was his age a consideration? Of course. However, when taking into account the 5 criteria in the list above, they were able to check each one off.

Despite the desire to exercise one's entrepreneurial DNA, many advisors who at first wanted to go independent didn't wind up heading in that direction. So, is it really age alone that stopped someone from following his dreams?

Advisors that didn't take the leap told us…

They didn't have as much entrepreneurial DNA as they first thought. Upon close examination, going independent wasn't really what they wanted, and it would have meant biting off more than they could chew. Turned out that significant up-front money plus turn-key support and infrastructure found in the wirehouses really was super important to them.

In my experience, there is definitively no truth to the statement "I'm too old." After all, 70 is the new 60 and 60 is the new 50 and I refuse to believe that one's age defines them. And conversely, there are countless 40-year olds who would never opt for independence.

Ultimately, the adage that "it's never too late" bears some truth-provided that the value you place on your ability to grow your business and serve your clients as you see fit is greater than your concerns about age or time.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.