4 Economic Considerations for a Wirehouse Breakaway
Leaving the wirehouse is a big decision and one that should not be taken lightly. Whether seeking freedom to leverage sophisticated technology, embrace your entrepreneurial spirit, or escape corporate agendas, the move to independence can be daunting. After my own transition, I gained a firsthand understanding of financial professionals' areas of anxiety and have realized their biggest concern revolves around the financial implications of a breakaway.
I recently joined a Financial Advisor IQ webinar with Brian Hamburger, founder, president, and CEO of MarketCounsel Consulting, and Craig Petrassi, managing partner of Kestra Private Wealth Services-associated firm Evoke Wealth Management, to break down the finances correlated with leaving the wirehouse and practicing independently. Below, I’ve outlined four key economic considerations from our conversation for a wirehouse exiter.
Real estate: Real estate is often the most expensive component of starting a new practice and the most common concern. For the first time in many financial professionals’ careers, it's an opportunity to set the tone for the firm’s culture. It’s essential to choose the space, furniture, signage, and office equipment that will best serve you and your clients for the next 5-to-10 years.
Beyond property selection, Kestra Private Wealth Services’ full-service support model can help lower real estate costs by identifying opportunities for tax advantages, lease negotiation, and tenant improvement allowances.
Infrastructure: After choosing an office space, it’s important to ensure that you’ve selected the appropriate equipment so you can hit the ground running. From equipment selection to maintenance processes, financial professionals have plenty of opportunities to gain control of their infrastructure. A few vital areas to consider include cybersecurity, internet services, and site management. These decisions can be costly, but Kestra Private Wealth Services works with breakaways to lessen the bill and generate additional revenue.
Technology: In wirehouses today, financial professionals can turn on their computers and utilize the predetermined tech stack and system offered by their firm. In the independent space, determining and investing in your own high-quality tech stack is critical and will allow you to leverage customized technology solutions that meet your unique needs. There are many options available to increase efficiency and automate processes, and Kestra Private Wealth Services is here to help you determine those areas.
Compliance: You’re likely not dealing with it on a daily basis, but compliance is an integral aspect of a firm and rules vary based on the model you choose. With a newfound independence, you will be able to determine what the compliance and regulatory framework of your firm looks like. In an ever-changing regulatory environment, it’s critical to have a strong compliance infrastructure. At Kestra Private Wealth Services, we specialize in handling your firm’s compliance matters so you can continue to focus on your clients.
Whether newly free or considering independence, it’s essential to understand the most costly and integral components of starting your own firm. Our team at Kestra Private Wealth Services is here to support you in every aspect of your transition to freedom. Tune in here for my full conversation with Brian and Craig and visit our website to learn more about how we can help you on your journey to independence.
