Any advisor who’s worked at a large institution knows the feeling: craving the freedom to carve out your own independent practice, mixed with the fear of losing the institutional support that comes with working at a big firm.
Pilot helps solve that problem. As an Office of Supervisory Jurisdiction (OSJ), we serve as the back office for a network of more than 100 advisors nationwide, offering a range of support services from business and marketing support to compliance guidance. Our goal is to ensure that advisors have all the resources they need to thrive. In this month’s blog, Justin McClendon, Director of Advisor Recruiting, and Chris Roney, Partner, OSJ Manager, and Director of Field Development, discuss some of the challenges faced by breakaway advisors and how Pilot can help them find an independent home.
Q: There are a lot of different advisors out there, and many of them have different goals and needs. What sort of advisor do you think has the most to gain from joining Pilot?
JM: The ideal type of advisor that we're trying to attract is someone who’s mostly focused on growing their advisory book of business and their assets under management. They’re someone who has been with a large firm for several years, but they’re getting a low payout on their AUM, and they don’t own their book of business. This is one of the hardest industries to build a career in, so you want to own your book.
Q: If advisors don’t own their book, though, they may be hesitant to go independent. Does Pilot help advisors build or keep their established clients?
JM: Many large broker-dealers tell their advisors, “People don't work with you for you. They work with you because of our name.” That couldn't be farther from the truth. Typically, anywhere from 25% to 50% of an advisor’s book ends up coming over when they join Pilot. Some advisors may have a non-solicit clause for the first year, but we conduct coaching sessions with them to ensure they understand exactly what they can and cannot do when it comes to communicating with clients. Once an advisor joins Pilot, they gain access to our entire network of advisors for collaboration and relationship building.
Q: Technology is one of the biggest struggles for newly independent advisors. What kinds of technological benefits do advisors receive from partnering with Pilot?
JM: First of all, being part of LPL Financial is a huge benefit for us. LPL spent $500 million on technology just last year. They’re known for having the best technology options in the industry, period.
CR: It’s all about the ease of doing business. Take servicing accounts, for example. Everything is done very quickly — if somebody needs money in their hands, we can have it out of their account and to them the very next day. Before our partnership with LPL, that sort of transaction could have taken up to a week. There’s also a plethora of educational information for the advisors, whether it’s information about this product or that product, everything is right at their fingertips.
Q: Having access to the resources of Pilot while maintaining independence as an advisor is one of the major benefits of working with an OSJ. What do you see as the other advantages?
CR: The central idea is that our advisors may be working for themselves, but they’re not by themselves. They have a complete back-office team available via phone or email, along with a dedicated recruiter to assist them.
Also, our group is made up of 100+ advisors. As an advisor, I might encounter a client who is a construction contractor, which is not typically my area of expertise. Fortunately, at Pilot, we have an advisor dedicated specifically to contractors. This means that advisors can draw on the expertise of others for their clients. Everyone in our advisor network just wants to help — they’re regularly providing guidance to each other.
Q: When you talk with advisors currently employed by large firms about the benefits of going independent, do they believe you?
JM: I was just messaging with someone who works at a large firm. I’d sent her what our differentiators are at Pilot. She immediately wrote back asking: “How much overhead would fall on me?” That’s what they want to know because they've been told that being independent means having giant expenses and paying for all your own support. When I responded, “None, it is included in your grid rate,” she was completely shocked.
Q: Anything else an advisor who’s looking to go independent should know about Pilot?
JM: Ultimately, many advisors are worried about going independent because they’re told that if they do, they’re going to be all by themselves, with no one in their corner. It's simply not true. Whether it’s technical support or professional guidance, we want to be the base from which our advisors can launch their independent practices. That’s what we’re really after: the entrepreneurial-minded advisor who wants to take advantage of what we offer so they can grow their business.