Broker Check

Why I left the Broker

March 14, 2023

Most people think an investment advisor is a person, but it's usually a business entity. I joined the investing world in 2018, and my official title was "investment advisor representative." To the average person, this sounds like an assistant role. In reality, it's just a legal way of saying I work for and represent a legal entity, aka the "investment advisor." Like my firm, Paladin Wealth Management is technically the Registered Investment Advisor.

I decided to take down my top 20 reasons for leaving the broker and going independent. I hope you'll agree and understand this move wasn't just for me. It was for my people. I wanted more for the people I serve, and when I couldn't find it in the marketplace, I decided to create it. 

  • Independence and control: Independent financial planners have greater autonomy over their investment strategies and can offer more personalized services to their clients.

  • Fiduciary responsibility: Registered investment advisors are held to a higher standard known as the "Fiduciary standard," meaning they must act in their client's best interests, while broker-dealers must only make suitable recommendations. This may sound redundant, but a significant difference exists between what is genuinely suitable and what is simple right for a client on paper.

  • Flexibility: Independent advisors have greater flexibility in choosing the tools, technologies, and investment products they use without being constrained by the rules of a larger organization. The "Red Tape" can be pretty intimidating with larger companies. I never enjoyed the feeling of being restrained in how I marketed.

  • Lower costs: Independent advisors can set their own fees and expenses. This can lead to lower overall costs for clients. 

  • Branding: Independent advisors can build their brand and develop their own unique identity, whereas broker-dealers often require advisors to use the firm's brand. I always struggled with this because no matter how good a company is, someone somewhere has had a bad experience. It's human nature. No company is perfect, but I lost a prospective client's interest more than once due to a broker and it's reputation for using customer service centers based overseas and giving poor service quality. This was troubling to me, because I couldn't fix it. 

  • Entrepreneurship: Going independent allows financial advisors to start their own businesses and control their own destinies.

  • Client relationships: Independent advisors can often build more substantial and longer-lasting relationships with their clients, as they can provide more customized services and individualized attention.

  • Technology: Independent advisors can choose the best technology solutions for them and their clients rather than being limited to the systems provided by a larger organization. I handpicked all the technology tools I use, from my calendar to custodian to data gathering. It all flows seamlessly, and I love it.

  • Compliance: Independent advisors have greater control over compliance and regulatory requirements, which can help reduce the risk of litigation and other legal issues. Compliance is a huge part of the financial industry, and with me being in Law Enforcement, I've always been a stickler for following the rules. 

  • Transparency: Independent advisors often offer more transparency in their investment strategies and fees, which can build greater trust with clients. I post our maximum fees in plain view on our website. I don't believe in keeping secrets, so I don't have a problem with this information being public. 

  • Culture fit: Independent advisors can create a culture that aligns with their values rather than being part of a larger organization with a different culture. The members of my firm are usually tough, gritty, and rough around the edges, like I am. We might curse a little and banter. It's all part of working tough jobs. You have to have a sense of humor. I definitely didn't fit into every corporate event I went to. 

  • Niche specialization: Independent advisors can specialize in niche markets and offer services tailored to specific groups of clients.

  • Access to institutional-quality investments: Independent advisors can access a broader range of investments that may not be available at a broker-dealer. I don't plan to provide institutional investments, but who knows where the firm will be in the future.  

  • Client-centric approach: Independent advisors can focus solely on their client's needs rather than being driven by a larger organization's sales goals and quotas. This one was huge for me because I never felt quite right receiving awards for commission-based performance. 

  • Education: Independent advisors can focus on educating their clients on financial matters rather than just selling products, which can help build trust and long-term relationships. I strongly dislike sales. I used to start every meeting with, "I'm a terrible salesman." and explain why a client should NOT pick certain investments before reasons they should. This usually led to more trust, even if I wouldn't earn any commissions, and I preferred a client's trust over a few bucks. 

  • Work-life balance: Independent advisors have greater control over their work schedule and can create a better work-life balance. Being able to adjust work around my patrol schedule was crucial. 

  • Control over compensation: Independent advisors can control their compensation and keep more of the revenue they generate. I didn't love seeing a large percentage of my revenue kept by someone who didn't do any of the work for a client. 

  • Succession planning: Independent advisors can plan for their succession and ensure their clients are cared for after they retire or leave the industry. I know I'll be in the industry for the next 30 years at least, but it's nice to know that one day my son can help dad run the business.

  • Regional focus: Independent advisors can focus on specific regions or communities, building deep connections and specialized expertise. I'm willing to bet no one knows the Memphis/Southaven area first responders as much as I do!

  • Finally, Innovation: Independent advisors can often innovate and experiment with new approaches rather than being limited by the rigid systems of a larger organization. If I want to update or change a system within my firm, it's a simple choice.

Hopefully, this sheds some light on how I ended up here, and I'm sure you'll agree that it was the right choice for our firm.