By Marc Cohen

The wealth management industry is experiencing significant change -- akin to a tectonic shift -- in how we define ourselves. The value of professional advice has become increasingly evident. In fact, over the last decade, the percentage of investors willing to pay for guidance from a professional financial advisor has nearly doubled, and with that advisors are seeking new ways to serve clients and evolve their practices to meet increasing demand.

As demand grows, we're also seeing a shift in the meaning of independence, and, in my view, a move in the wrong direction with more firms espousing independence as a core value yet treating the advisors who affiliate with them as anything but. As an industry we must adhere to a more clear and meaningful approach to independence that puts the advisor and their clients at the center.

With sometimes contradictory messages out in the marketplace, its essential advisors consider how their practice is run and supported. You should have the freedom to run your independent practice your way. So, how can you set up or evolve your practice to maintain your independence while meeting the growing needs of the clients you serve?

Here are three steps to achieving true independence:

Define your vision of independence. People tend to define independence in our industry by affiliation model, but that's an incredibly myopic standard. Independence and autonomy should exist regardless of the type of financial advice business you run. For advisors, this means freedom to control your own destiny, freedom to run your business the way you want to, and freedom to define the client experience you deliver.

So, advisors seeking independence should actually start by considering: how do you define your own independence? Maybe it's owning your own business, maybe it's about having your own brand, perhaps independence for you is more grounded in having control over your product shelf, or maybe it's something else entirely. It can, and should, look different for everyone, but it's up to you to define it free from outside control.

The importance of autonomy is driven not only by the desires of advisors, but also by clients who seek personalized advice free from incentives to promote proprietary products or the agendas of large companies. A new survey by Capintel, a B2B fintech company, confirms what many of us in the industry already knew: Trust is more important than performance when selecting an advisor. How much trust can you build without autonomy?

Autonomy can take many forms. I have been in this industry since I was 17-years old and have held nearly every position supporting advisors. The key to success doesn't lie in a single approach; rather, it lies in the ability to define your own success and how you will achieve it. Consistently, most advisors I speak with are intentional about including their clients' achievements in their own definition of success.

The beauty of independence lies in the opportunity to make your business your own -- to prioritize where you spend your time and how you operate. My advice: Ensure you have the freedom to control where and how you serve your clients, then build your unique version of independence from there.

Prioritize your time and business operations around your vision. Historically, independence was only achieved by hanging your own shingle. However, as the independent wealth channel has matured, an abundance of support options are now available, enabling you to make your own decisions about how to allocate your time and what to outsource or insource.

When you have that kind of freedom, you can view your business from a different perspective.

You can be independent while partnering with third parties for most of your operations, delegating investment management or even fully outsourcing all business operations as an employee advisor. Consider where your time is best spent and set up your business around those activities. You maintain your autonomy by serving the relationships that power your business, not by running compliance or other functions in-house.

Owning those decisions is the true power of exercising your independence and making it your own. That's where independence allows you to accomplish even more.

Choose the right partners. The strength of any business is closely tied to the partners they work with and that is especially true in wealth management. Once you know what your vision of independence is, you need partners who share that vision and who have the tools to help you succeed your way.

If your partner believes that independence can only be achieved through one business model, or that your client relationships are not your own, then they may not give you the autonomy to evolve your business as an independent advisor.

If independence is important to you, then the litmus test for any potential partnership -- whether with investors in your business, colleagues, potential vendors or business partners -- should be: Do I own my client relationships and the trust I've built with them? When I run into my clients in my community, at the grocery store, or at our children's school, or a charity event, can I confidently look them in the eye, knowing I am fully empowered to act in their best interests?

Partners of all sorts must provide flexibility and the tools or solutions you need to serve your clients in the way that makes sense for you and for them. Achieving independence is only possible with partners who respect your vision and your autonomy.

As you contemplate your business structure for the future and consider with whom you want to work, the most important thing to remember is that true value lies in the relationships you've built with your clients. Everything else can be whatever you want it to be.

Marc Cohen is the managing director of business strategy and innovation for LPL Financial. He joined the firm in 2018 to help lead development of new advisor affiliation models. He was previously the chief operating officer at MarketCounsel.

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

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March 21, 2025 16:04 ET (20:04 GMT)

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