While recent surveys show that technology and compensation are leading drivers of advisor transitions, the reality on the ground tells a more complex story. Speaking with financial professionals daily, I’m hearing about deeper frustrations that go beyond just systems and payouts.
The Independence Illusion
Many advisors are experiencing what we call “captive independence,” or the illusion of running their own practice while being constrained by their firm’s rigid infrastructure. This particularly impacts advisors at large broker-dealers, where being one of thousands of representatives often means limited flexibility and restricted access to decision-makers.
What Captive Independence Looks Like
Challenges with technology and compensation pain points are legitimate, but advisor dissatisfaction runs deeper. Frustrations include:
- Compliance departments that take a one-size-fits-all approach, forcing advisors to water down their service offerings to meet standardized requirements
- Technology systems that create obstacles rather than efficiency
- Limited access to senior leadership when important decisions need to be made
- Pressure to push specific products or services that align with the firm’s agenda rather than client needs
For example, consider the experience of Joel Broersma of Pathway Financial Design. At his fifth broker-dealer – which he didn’t choose, but inherited through a merger – he found himself dealing with increasingly restrictive compliance oversight and a “funnel” approach that forced him to modify his service model to meet the firm’s standardized requirements rather than his clients’ needs.
And this environment of restricted independence doesn’t just impact advisor satisfaction; it directly affects client service and practice growth.
Time for a Change?
If these challenges sound familiar, you’re not alone. A recent survey found that 83% of advisors who switched firms in the last three years are happy with their decision. In fact, 35% wish they had made the move sooner.
Want to learn more about how advisors are breaking free from “captive independence”? Our Founder and CEO, Billy Hopkins, explores how the transition process has evolved, what to look for in a new partner firm, and why now might be the perfect time to make your move here.
