To me “Indy” would mean independent RIA -meaning you set up your own firm, file your own ADV, set your own policies etc. You may or may not be associated with a brokerage.

Indy to me means that I own my own business, call most of the shots and keep much more of my commissions than my B/D.

There are several but the main one for me is, I hire & fire my BD they do not hire me.

When a B/D is just a firm the clears trades and provides some support to your firm for a fee.

OK new guy here’s the basics.  In this biz you can set up your business several different ways.  You’ve got to figure out the pros and cons of each and pick the one that’s best for your personal situation.  It’s not always about the money.  OK, a lot of the time it is, but not always. 

If the brokers are independent contractors instead of employees, it is an indy firm.

Thank you for ALL of the info… For some reason I couldn’t get a beat on the indy concept.

I’m letting you know that you don’t have a handle on this.

second the motion…

[quote=NJ FA 2008]Okay.  I’m new.  And in search of a new place to work.  And while I’m looking I have heard the term independent.  Is it simply a “place” that does not have a in-house B/D?   Is there a defined definition?    Sometimes I feel dumb and happy… And sometimes I don’t feel so happy![/quote]
No - there is no agreed definition of the term independent.  Therein lies much of the source of confusion.  Following is a bit oversimplified but should help clarify.

If you are paid - in any part - by commissions you need to be a reg rep of a broker/dealer.  All wirehouses and big name firms you recognize are (or own) b/ds.    So are many so-called “independent” firms like LPL or Raymond James, Cambridge, etc.  The main practical distinction between the wires (to lump all non-independent b/ds together for purposes of this discussion) and the independents, as anon pointed out, is the legal relationship between the b/d and the reg rep: those working at the wirehouses are employees, while those at the independents are independent contractors.  In addition, the wirehouses provide office space, staff, equipment, etc. and because of that pay out roughly about half what the independents do (depending on production levels), but with the independents you are personally responsible for covering many of those expenses yourself. 

Wires also are more common places to start because you receive training and some nominal salary in the early days.  Independent b/ds and/or the independents affiliated with them seldom have any formal track for that, so it is more rare - but not unheard of - to start as a new new on the independent side.

So typically when you hear people talk about going independent in this industry they are referring to independent b/ds.

But that’s not the whole story.  Some people choose to forego commission payments in favor of fees.  Those who do so have no need of any b/d at all, and become RIAs.  They are more independent that the independents, so to speak, as they keep 100% of the fees they earn and are responsible for 100% of their expenses and management decisions.  Part of the reason you hear less about them is they do not spend money like the independent b/ds do to advertise themselves to potential new reg reps. 

As if that’s not enough, there is also the hybrid advisor who owns their RIA AND ALSO affiliates with a b/d for commission business.

Oversimplified, but generally there it is.  If you’re new, you won’t be likely to find many opportunities on the independent side, in whatever definition of independence you choose to use.  That generally works best for experienced advisors with an established book.

Good post, Morphius.  There are just so many permeatations (sp?).    For example, look at a Northwestern Mutual insurance agent.  They are employees with their Northwestern Mutual insurance business.  However, with their securities business, they use an independendent Broker Dealer.  With any business that they write outside of Northwestern Mutual, they are also independend contractors.  Yet, despite not being employees of their B/D, they can’t go to the bathroom without permission of their B/D (not meant as any slight).

I’m letting you know that you don’t have a handle on this.

Part of the "mystery" is simply because this is a commission business.   Compounding this is the fact that one often has several sources of income that pays in a different manner.  New reps often have different commission schedules than experienced reps. 

[quote=anonymous]

A firm with an honest  & reputable name. 

[quote=NJ FA 2008][quote=anonymous]

A firm with an honest  & reputable name.