THE POWER OF INDEPENDENCE

THE POWER

Independenceof

July 4, 2021, is the 245th anniversary of the publication of the Declaration of Independence. For most of us, this holiday is a source of great pride, and it has historically been a day when we set aside any differences we may have with each other as we celebrate our country. The sacrifices of prior generations that have allowed this amazing experiment in democracy and freedom are acknowledged with community parades and gatherings of family and friends in backyards and parks from coast to coast. Although political opinions may vary from person to person, we are fiercely united in our belief that each of us maintains the right to not only have our own, independent beliefs but that we also have the right to express them. This disposition can also be found among independent financial advisors. Who are these professionals, and why should you care? What is an independent financial advisor? For purposes of this article, licensed independent investment professionals are defined as those who are not employees of a large securities or insurance firm that has them tied to minimum production requirements of a specific investment or insurance product. Instead, they are typically either self-employed or are employed by a firm that is privately owned and operated by industry professionals. The theory is that because these professionals are independent, they should have fewer distractions to prevent them from focusing on your best interest. We believe this to be true.

Why do many financial advisors seek independence? A popular career path used to be for a financial advisor to get into a large firm with an easily recognizable name and a solid training program. Let’s call this Big Firm Z. Those that survived the first few years, which usually is a very small percentage of hires, would then build a client base that they could focus on for their entire career. It would be typical for Big Firm Z to seek additional revenue streams for the business by creating proprietary mutual funds and/or life insurance products and expecting their employees to sell them to their clients.

Although this is still a prominent representation of the industry, the tide has been turning. Financial advisors began to think differently about being pressured by their employer to utilize investment products with their clients that had the same logo as the one on their business card. Firms like Big Firm Z took steps to try and address this practice, including changing the name of their proprietary product from “Big Firm Z Growth Fund” or “Big Firm Z Whole Life” to a product name that gives

the appearance of independence. Even with these changes, many financial advisors have still been uncomfortable and have decided to leave the comforts of a big firm (aka wirehouse) and to move their securities licenses to an independent Broker Dealer/Registered Investment Advisory firm — in effect “hanging their own shingle.”

Why work with an independent financial advisor? The result? Clients seem to like working with an independent financial advisor. In fact, the fastest growing part of the wealth management industry is from this market segment. This growth is expected to result in greater assets being controlled by independent financial advisors than by those who are wirehouse-based by 2023.1 This swing is significant and we feel reflects the preferences of enlightened investors. If the following sound attractive to you, you may find working with an independent advisor to be attractive as well:

• “I want an advisor who is unencumbered by proprietary investment or insurance products.” • “I want an advisor who defines their own business rather than one who is defined by their employer.” To learn more about opportunities that may await you, give us a call or visit our website at www. mapyourfuture.net. This year, when our team gathers with friends and family to toast our great nation’s independence and to affirm that we all have more in common than we have differences, we’ll raise our glass a second time to also honor independent financial advisors everywhere. Hope you’ll do the same!

1 “Wirehouse asset market share fell from 42.6% to 34.0% between 2007 and 2018 and is expected to fall further to 29.2% by 2023. Conversely, RIAs and hybrid RIA firms saw an increase in their collective asset market share from 16.8% to 24.2% between 2007 and 2018 and are expected to have an asset market share of 29.6% by 2023” 2020 The Year Wallstreet Lost the Investment Management Race, Investment News, December 21, 2020 FILE# 3626270.1

Photo by Indre Cantero  Tom McCartney and Sharon Piet are teammates at My Advisor & Planner and are Registered Representatives and Investment Adviser Representatives with M Securities. Securities and Investment Advisory Services are offered through M Holdings Securities, Inc., a Registered Broker/Dealer and Investment Adviser, Member FINRA/SIPC. My Advisor & Planner is independently owned and operated.

Tom and Sharon can be reached at info@mapyourfuture.net, at 630-457-4068, or you can visit them at www.mapyourfuture.net.

Securities and Investment AdvisoryServices offered through MHoldings Securities, Inc. (Member FINRA/SIPC). My Advisor &Planner is independently owned and operated.