When Is the Right Time to Go Independent as a Financial Advisor?

Breaking away from a big firm to go independent is one of the biggest career moves a financial advisor can make. It puts you in charge of your own future and business decisions. Many advisors weigh this step for months or even years. Deciding if it’s time depends on: 

• How solid your client base is
• Where you stand financially
• What rules apply
• How ready you feel to take the lead

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Can Your Clients Come with You?

Your clients are the foundation of your future practice. Before going independent, think about how likely they are to follow you. How strong are your client relationships? How much do your clients trust your guidance? What kind of communication have you had with them over the years? These answers will help you determine if your clients will come with you. It also helps to look at the industry trends. Many advisors who make the switch keep a large percentage of their clients, but not everyone does. 

Clients follow advisors they know and trust. If you’ve established strong ties over time (i.e. keeping in touch often, offering personal attention, and staying consistent), there’s a good chance they’ll stay with you. Advisors who go independent tend to retain about 87% of their clients on average¹. 

Still, there’s no guarantee. The more open and responsive your communication is, the better the move will be.

Planning Ahead for an Easy Transition

Once you’ve gauged how many clients might follow you, it’s time to plan how you’ll talk to them. How you communicate this change will likely be a deciding factor in whether they follow you. Begin by checking any non-solicit or non-compete agreements you’ve signed. Some firms limit what you can say or when you can reach out. If you’re joining a new platform, their team can often help with paperwork and onboarding steps. 

Give yourself time to organize a timeline, prep client materials, and figure out when to reach out. A little structure early on keeps you focused and makes the process easier to manage.

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Gauging Your Financial Readiness for Independence

Going independent comes with upfront expenses and the possibility of slower income at first. That’s why you need to review your finances before making the move. Take time to understand what you’ll need to get started and how you can go without a steady income.

When you leave a larger firm, you assume the costs they used to cover. These expenses may include:

• Technology
• Compliance support
• Branding
• Office space
• Licensing
• Legal Help
• Admin Support

These costs vary depending on how you set things up. Some advisors start lean, while others invest more from the beginning. Either way, it helps to create a rough budget so there are no surprises along the way.

Planning for Income and Payout Changes

Your payout as an independent advisor can be higher than what you’d earn at a wirehouse or large firm. At wirehouses, brokers on the low end might take home 35% of their gross revenue, while top producers keep 50% to 55% of their gross revenue². It depends on production levels. As a solo or small firm advisor, you might keep more, but you also take on the expenses.

Some use the 40–35-35 rule to plan: 40% for take-home pay, 35% for business expenses, and 25% for taxes. It’s not perfect, but it gives you a starting point. The more realistic your income plan is, the less stress you’ll feel in the first few months.

Getting Familiar with Registration Rules

Before you go out on your own, you need to understand how assets under management (AUM) impact registration. Where and how you register depends on the size of your book, and those rules shape your timeline.

Registration Based on AUM

Registration requirements change depending on how much money you manage. If you have less than $100 million in AUM, you’ll typically register with your state; if you have $100 million or more, you’ll register with the SEC³. If you’re growing quickly and expect to cross the $100 million mark soon, SEC registration might be the better option. Taking time to think through your growth plan now helps you decide what direction to take. 

Possible Changes to Watch For

The SEC has discussed raising the AUM thresholds, which could alter who qualifies for federal vs. state registration. Nothing is finalized yet, but staying updated on these discussions is a good idea. 

You don’t have to track this alone. Many advisors work with compliance partners or platforms that monitor these developments and let you know when something changes. The goal is to avoid surprises in the future. 

Checking Your Experience and Business Plan

Going independent means taking on more responsibility. Before making the move, it’s worth reviewing your experience and having a plan that will guide you through the change.

Experience Builds Confidence

Advisors with a few solid years of experience often feel more ready to take this step. If you’ve been managing portfolios, holding client meetings, and navigating different market conditions, you likely have the foundation you need. 

Your track record shows you can handle more than just the technical side of advising. It also shows you’re ready to take charge of your business decisions. That kind of experience helps when you’re on your own.

A Business Plan You Can Work From

Even if you’re joining an existing platform, a business plan gives you direction. It helps you map out how you’ll earn money, who you’ll serve, and how you’ll grow. Your plan may include elements like:

• Your fee model
• Tech tools
• Marketing ideas
• Hiring goals 

Writing it out forces you to think ahead. What do you want your first year to look like? What’s most important to your clients? These answers don’t need to be perfect, but putting them on paper gives you something to work from. 

Support From People Who’ve Done It

You don’t have to figure it out alone. Many independent advisors work with mentors or coaches who’ve already made the move. They can offer feedback, answer questions, and share what they wish they’d known sooner.

Some platforms also offer advisor networks or transition support programs. Connecting with others, especially those with similar goals, can have a direct impact as you plan your next steps.

Paying Attention to What’s Happening Around You

Sometimes the best time to go independent has less to do with you and more to do with what’s going on in the industry. Looking at current trends, contact timelines, and available support options helps you decide if the timing is right for you. 

Changes in the Industry and Firm Contracts

Many advisors are nearing the end of long-term contracts or retention bonuses that began during market fluctuations or firm mergers. These agreements may have made it hard to leave before, but once they expire, the door opens. 

At the same time, incentives at large firms have been shrinking. Fewer perks and more restrictions are causing advisors to look elsewhere. In fact, independent Registered Investment Advisors (RIAs) are projected to control 31.2% of assets under management by 2027⁴. That steady shift demonstrates that more advisors are choosing to go it alone. 

Looking at Platforms and Support Models

Not all advisors go fully solo. Some join hybrid or fee-only platforms that offer back-office support, tech tools, and help with compliance. These options reduce some setup work and give you more room to focus on clients.

Each setup is a bit different. Some offer more freedom, others more structure. It’s worth comparing what each model includes, especially if you’re looking for something that fits your work style or long-term goals. 

Knowing What to Expect From the Transition

Going independent can bring more freedom, but it also comes with change. The advisors who do well tend to go in with a clear view of what’s ahead. That includes the reasons for making the move and the challenges that may arise along the way.

Reasons That Matter Most

For many advisors, this move isn’t just about money. It’s about having more say in how they work, how they serve clients, and what kind of business they want to build. Some want a simpler setup. Others want more flexibility. Some are planning for the long term and want to build something they can eventually pass on or sell.

Before you decide, take a step back and ask: What are you trying to fix or change? The more clearly you can answer that, the more assured you’ll feel in your decision.

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Challenges You’ll Need to Work Through

Leaving a firm, especially one you’ve been with for years, can be stressful. You might worry about losing clients, running into legal trouble, or making the wrong call. It’s normal to feel uncertain at first.

There’s also the mental side of the shift. You might find yourself losing sleep or second-guessing the decision. But you’re not alone in that. Many advisors have gone through the same thing and come out stronger. With a clear plan and steady communication, you’ll be better prepared for the bumps along the way.

How to Know When You’re Ready

Going independent isn’t something you decide overnight. But if you’ve built strong client relationships, have a financial cushion, understand the rules, and feel ready to take ownership of your business, the timing may be right. It’s a personal and professional decision, and one that starts with knowing where you stand today.

Key Takeaways

• Most advisors retain a large portion of their clients after going independent.
• A clear transition plan and strong communication go a long way.
• Upfront costs and delayed income are normal, so budget accordingly.
• Registration depends on AUM and may affect your timeline.
• Independence offers more control but comes with more responsibility.

Action Items

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FAQs

How can I assess if my clients will follow me to an independent practice?

Think about how loyal they’ve been during past changes or transitions. Have they relied on your judgment, or are they attached to the firm you work for?

What are the key elements to consider before deciding to go independent?

Think through your client base, your finances, legal terms, personal goals, and what kind of support you’ll need both now and after the transition.

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