A recent publication by Schwab is designed to encourage independence, with Schwab as the custodian, clearing firm, and offeror of products and services.  The points raised deserve consideration by any advisor going independent in order to become an SEC or state-registered investment adviser. The numbers clearly suggest that firms like Schwab are on the right track. The number of advisors moving to the RIA channel grew by 4.8% from 2016 to 2017.

Let's review the advantages.  First, the Schwab publication promotes the freedom that comes along with independence.  Perhaps most importantly, Schwab claims that their investment advisers are free to focus on their clients and their clients' goals, without worrying about meeting sales goals.   Independent advisers likewise have the flexibility to decide how to communicate with clients, how to market to clients, and how to craft the client experience.  Schwab contrasts that to advisors affiliated with a broker-dealer, who may be limited to only offering their broker-dealer's services and communication plans. 

This flexibility is available to independent advisers because they are their "own boss."  As the boss, independent advisers have the freedom to craft their brand and their office environment as they see fit. Of the investment advisers who recently started or joined an independent adviser, Schwab cites a study for the proposition that 94% of those independent advisers said that it was very important that they now had the freedom to do what's best for their clients.

Second, the Schwab publication emphasizes that independent advisers make the determination of how much of their revenue they keep.  Schwab reports that they also have control over the fees and expenses that they charge associated with their services.  Finally, independent advisers also have the ability to set up their business in a way that allows them to sell their business in the future.

Overall, Schwab certainly raises good points for discussion, though they are highly generalized and need to be studied carefully, and compared to other available options, by advisors and their transition consultants, such as the professionals at Financial Advisor Transitions.