Independence For Advisors Under $300 Million

James Miller, Contributing Editor & Research Analyst, Wealth Solutions Report

Founder Of RIA With Focus On Small To Mid-Sized Advisors Explains How They Should Approach Independence And Says They Have More Options Than They Realized

It’s a rare day that you don’t hear about advisor independence and recruiting trends. These issues remain top of mind for a wide range of industry participants, including RIAs, IBDs, OSJs, advocacy groups, funders and backers and, of course, financial advisors, as advisors continually seek the best arrangements for their clients and themselves.

Tom Prescott, founder & Managing Member, Advisory Services Network

Some say that small and mid-sized advisors, ranging from $15 million to $300 million in assets under management (AUM), find more limited options and sparser information than larger advisory firms. While many press releases celebrate recruitments of advisors in this range, the question remains whether they truly found the best way forward or rather settled for what they could find.

We caught up with one executive who says a broad array of options to successful independence are available if advisors ask the right questions and know where to look. Tom Prescott, a founder and Managing Member of Atlanta-based Advisory Services Network, with assets of $5.7 billion and 185 representatives as of December 31, focuses on advisors in the $300 million and under range.

Know your options

Prescott walks us through the considerations and choices small and mid-sized advisors must make when considering their independence options. 

WSR: Why do many firms overlook financial advisors with under $300 million in assets when recruiting? What is the typical situation for these advisors regarding their independence and support resources, and what would they like it to be?

Prescott: While there are certainly options for small and mid-sized advisors, they typically do not receive the all-inclusive higher end options often found in the advisor and fiduciary channel. 

Over the last several years, many firms that compete for advisors at this level emanated from the independent broker-dealer channel. Many IBDs entered the market to support independent advisor practices so they wouldn’t lose registered reps and advisors who ultimately want to go independent and operate as fiduciaries. 

Outside looking in

The larger advisory firms (typically supported by private equity) are generally trying to buy or add practices that have a particular scale in a geographic area and can benefit from the expertise that these firms bring. These larger firms tend to pursue larger practices that want an exit strategy, and the current way in which all of this functions often leaves smaller advisors feeling like they’re on the outside looking in.

WSR: Do advisors under $300 million in assets desire independence? What are the typical ways they like to set up their business? How do they perform once they achieve the desired situation? 

Prescott: Yes, advisors at AUM levels under $300 million have many of the exact wishes and desires that larger, more prominent advisors have. But the market for advisors with less than $300 million is very underserved with fewer options available. 

In moving to an independent model, these advisors need to research the offerings and how they will benefit from economies of scale and possibly from self-branding. They also need to understand the impacts of independence on their clients. Who will own their book of business? How will their compensation be calculated? 

Locked into the unexpected

It’s unfortunately very easy for an advisor to get locked into a situation with unexpected consequences, but with the right support and a solid understanding of not just how they’re going independent but why, advisors under $300 million have a very real path to success in independence. 

WSR: Are advisors under $300 million aware of the options available to them? If not, what are they usually unaware of? How can they find out what’s available?

Prescott: Advisors in this range are generally aware of the traditional options, many of which might not be feasible or make sense for them or their clients. Unfortunately, many of these advisors are not aware of other available options. 

Paths to independence

Whether the advisors use their own resources or the resources of consultants or recruiters, they need to have clearly defined goals and questions that will help them vet the available firms and choices. In light of this, whether they end up working with us or not, we start every potential advisor relationship by asking lots of questions. 

Even if we are not the best fit, we want advisors to know that there are more options out there, and more paths to true independence, than they realized.

James Miller, Contributing Editor & Research Analyst at Wealth Solutions Report, can be reached at

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