Cost of going independent?

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Feb 2, 2012 11:06 pm

What are the costs associated with going independent? I'm looking into ING financial partners as a B/D.

Feb 3, 2012 12:39 am

[quote=NumbersGeek]

What are the costs associated with going independent? I'm looking into ING financial partners as a B/D.

[/quote]

From Broker-Dealer data 2011, ING looks like affiliation fees of $1,500 and E&O Insurance is $2,350.

Feb 16, 2012 11:46 am

Jul 9, 2012 11:56 am

It looks like you need a lot of courage and money in order to go independent, owning your own business is rewarding but it's also very costly and time consuming. Of course you could always find low cost solutions without compromising the result's quality, you just need enough time to discover them. Finding a proper office space was a great headache for me, I had to go for an old building and the only reason it looks so nice these days is because I had epoxy flooring done for it. You would be amazed to know how much your office counts when meeting with your customers!

Jul 12, 2012 3:43 pm

Or you could save yourself all the time and expense of hanging your own shingle and still get all the benefits. (Well, most of them) Join an existing indy operation.

In my experience most people who want to go independent and end up joining another independent outfit, instead of hanging their own shingle, are still privvy to a lot of the advantages, such as a higher payout (typically between 60-80%) and more relaxed culture. Sure, you don't call the shots... but most of the time you're joining as a "partner" and while you may not be the principal, it's nothing like working for a branch manager at a major wirehouse or regional.

Jul 23, 2012 10:39 am

It amazes me how many advisers will leave one captive employer and replace it with another. The right answer has to be: "no matter the cost -go for your own (RIA) business". The startup costs are immense but well worth it in the long run.

Jul 19, 2012 3:55 pm

Stand up and look around you. Everything you see (other than other advisors) you have to buy as an Indy.

Did it 7 years ago and never looked back. I had to:
* rent an office (next time use a broker);
* the printer/copier/scanner/fax machine (monthly lease)
* Asst (get a good one)
* Insurance (liability, E&O, W/C)
* Payroll taxes for you and your staff
* phone system (wow are those expensive)
* pictures on the walls
* furniture for you and your staff
* signage

Its a big operation. Of course you can work out of your home but think of the impression that makes on prospects.

I left a big place 7 yrs ago and have quadrupled my production since. Glad I made the move.

Good luck

Amber

Jul 24, 2012 12:13 am
annie22:

It looks like you need a lot of courage and money in order to go independent, owning your own business is rewarding but it's also very costly and time consuming. Of course you could always find low cost solutions without compromising the result's quality, you just need enough time to discover them. Finding a proper office space was a great headache for me, I had to go for an old building and the only reason it looks so nice these days is because I had epoxy flooring done for it. You would be amazed to know how much your office counts when meeting with your customers!

Why would someone just getting started invite people to their office anyway? Talk about roadblocks. Getting started is cheap.

Aug 30, 2012 9:42 pm

How much it costs depends on you. i can tell you from personal experience it doesn't need to be expensive. i started in 1990 by placing $10,000. in a seperate checking account to be able to keep track. i rented a very small 2 rooh office that cost me $300 a month by contacting the rental agent for an office complex and explaining i wanted low rent but would hopefully grow and he would be rewarded later (he was), you do not need a new, expensive phone system or copier to start. use a cell phone or buy a used phone system like i did. when companies replace their phone systems, the phone salesman can sell you their old system for a few hundred dollars which is all profit to him. an mfc copier, fax machine cost less than $500. i bought a used phone system for $350, a brother mfc for about $400 and desks and chairs from office depot. for a very little money, i was in business. the best part is you have existing clients and the money flow is almost immediate. in my case, i believe i set my office up for $4,000-$5,000. Within 2 years, i moved to a suite of offices. in 4 years i bought a multi million dollar building from cash flow. now i own a 130 rep bd. it truly doesn't matter whether you start in a room in your house, rent an office in one of the office suites that will provide you with phones, access to fax, copier, conference room, etc or set up at huge costs, the important thing is to give it a try if you think owning your own business is something you would like to try. you can alwaysgo back to working for someone else but if you are an entrepreneur, you will quickly find you love it. in my case, it truly is a labor of love. running and owning your own business, while tough in a lot of ways, allows you to control your own destiny. good luck to all who try.

Sep 26, 2012 5:38 am

Going independent usually requires a lot of money. I guess it is a dream of a lot of people, including me as well. I would also love to start my own business and face no more problems of subordination at work.

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