Clients value independence from their advisors. In part, that means getting impartial advice that revolves solely around what’s best for them. It also means having the choice of products that suit their goals. For advisors this model can advance their clients’ interests – and their own careers.
In this industry, true independence comes when you’re not restricted by the dealer agenda. Often, advisors face pressures to take part in proprietary products or plans. They may have financial incentives to do so. Those offerings may well be strong, but they still introduce an implicit bias to the process. It’s unavoidable.
To be sure, there’s appeal for advisors to work in the big banks or insurance companies. Their brands are a great lead-in to products and plans. They have a marketing advantage that you can tag along behind. But the question then becomes, What are you ultimately selling? Is it a product, a brand or your capabilities?
For independents like Sterling Mutuals, it’s service first, product second.
The advisors who’ve made the move to Sterling understand the many benefits of working in an independent firm. Most important, independence offers the ability to seek the best solution for the client from the broadest product shelf. The advisor’s value comes through clearly. Everyone talks about tailoring advice and services. Being independent makes it easier to be truly client-centric.
For clients, that’s a win. For advisors, that’s a win, too, as independent firms also provide a desirable culture.
Bigger firms have multiple layers of managers looking down and reviewing your performance. At Sterling Mutuals, the only quota we have is that advisors be able to cover their operating costs and conduct a professional practice. It is the quality of the individual that matters most. We don’t provide any sales incentives to influence the advisor’s choice of product.
We look for advisors who understand what independence means, and who can do their best without external pressures around product. Advisors with an established book of business—for example, north of $20 million—are also rewarded greatly from our model. Sterling Mutuals has a flat-fee back office. An advisor pays us a flat monthly, plus expenses, and receives 100% commission. So our advisors can control expenses while benefiting directly from all the growth they generate.
Independent firms come in all sizes, but we believe it’s an advantage to operate within a sizable one. Advisors need to be associated with a firm that has a solid relationship with the industry on the manufacturing and regulatory sides, and that participates in industry events and review groups.
We also have a segregated digital platform to onboard new advisors, allowing them to transition efficiently.
Technology is another advantage for the larger independents. Small firms don’t always have the resources to routinely invest in the systems that make a difference in productivity and ease of operation, or to scale up those solutions. And larger organizations that do have the resources can move slowly; they may have legacy technology that doesn’t work well together. Remember, big ships can take time to turn.
Independent yet still large firms are nimble enough to invest in the technology platforms and back-end processes that can save significant time, and enable better client and portfolio management.
That’s the case with Sterling Mutuals’ use of the OneBoss software solution, which offers an advanced client portal, document management and workflow capabilities, head office oversight of trades, Tier 1 and Tier 2 compliance, and more. It’s also true with the Ensemble next-generation client service platform, which can automate much of the client experience. The right technology allows advisors to do more.
Firm size matters in another way. In larger shops, advisors might feel that they’re anonymous. They can become simply a number to head office, not a name. Sterling Mutuals makes it a point to know each advisor. Every single one has a direct pipeline to senior management. We understand them and the support they need from us to succeed.
Our advisors also have the freedom to control their practice. No two operate in exactly the same way, but they all have one thing in common: they aim to provide clients with the best advice and selection of products possible. That’s the common dominator in going independent.
This three-part series has looked at what can put advisors in the best position to excel. In Part 1, we discussed efficiencies that come from smart investments in technology and processes. In Part 2, we explored how being free from proprietary products and operating as a fee-for-service model reaps rewards for all.
Together, these three topics are about working within a truly supportive culture and being able to deliver superior experiences and outcomes for clients.
Learn more about how Sterling Mutuals can help advisors to meet their clients’ needs.