3 Tips to Fly Under the Radar While Planning Your B-D or RIA Exit Strategy

7 min read
January 15, 2024

I cringe as I write the words “how to fly under the radar,” but unfortunately, we live in a world - and you work in an industry - that doesn’t always allow for smooth, transparent, and easy communication about exits and pivots. We know from experience that if you’re considering going out on your own in the financial services space, you may want to think twice before you start bragging about it at your office. 

A few years ago I wrote a blog about the industry’s interest in keeping you out of the RIA fee-only space, how employers and companies can lure you back into the “safety” of their institutions by spinning myths about what it takes to go out on your own. It’s one of our most-read blogs for a reason. Because it’s all true. 

But we know at XYPN that you CAN go out on your own and that doing so leads to some of the most beautiful experiences: becoming the architect of your life and all of the freedoms that come with it: time, making an impact, and building something with your own two hands that is yours to shape how you see fit—to name a few. 

XYPN’s growing advisor network can attest that the grass IS greener on this side.

But first, you must prepare for your exit tactfully and intentionally. Just ask any of the advisors who came before and successfully made the transition to independent RIA ownership—this is important! 

Here’s how you can do it:

#1. Evaluate Your Current Employment Situation

You can gather vital data while you’re still employed about what your exit experience may look like. From how your employer speaks about former employees to the offers they make when resignations are tendered, it will help you gauge when and how to deliver the news of your departure.

You should be well aware of any contracts you signed coming into your job: non-competes and non-solicitation agreements are common and often have explicit clauses about the work you cannot participate in upon exit. Check out Is Your Non-Compete Binding? Helpful Tips for Transitioning Advisors to familiarize yourself with the impacts NCAs can potentially have on your departure and client relationships. 

Some people take those contracts to a lawyer in their state to understand the enforceability of such contracts. From there, some people ignore them entirely, while others follow them to a T. I’m not in the business of providing legal advice, so I won’t recommend what to do with that information, but my recommendation is to get clear at the very least of what components and contracts are at play upon your departure and how that affects your runway, timeline, and departure strategy.

One particular thing you’ll want to understand is how those contracts dictate the relationships you and the firm have with your clients. If you’re working at a large B-D or an institution, those relationships are owned by that company, and in many cases, the second you resign, they are working to transfer those clients to another advisor.

Say, for example, you’re under a non-solicitation. This means you cannot contact your clients, and ask them to move over to your new firm. As such, starting with a ‘book of business’ is unlikely. This is often an emotional part of the resignation: As an advisor, you care about your clients, their well-being, and their care, and want to work with at least some of your former clients. However, depending on the nature of the contract you’re under, you’ll want to be prepared financially AND emotionally to deal with that.

#2. Do Your Research

So you’ve got the itch. You’ve been devouring XYPN Radio’s podcasts that paint the picture episode after episode of what it takes to go out on your own. You’re listening to Michael Kitces Advisor Success Podcast to hear about what years 5-10 could be like if you’re on your own. You’re waking up at night dreaming about the flexibility and the freedom you’ll have when you’re on your own. So the time is the perfect time to begin the real research and preparation.

It’s never a bad idea with a new venture to create a new email address that you can use to sign up for newsletters, and marketing materials, register for webinars, etc. This keeps all your new ideas, content, and resources in one place, and not accidentally delivered to your work email. If you’re uncomfortable with using your real name with some of these platforms, it’s okay to use a pseudonym, and then change it afterward.

Get inspired, informed, and connected as you prepare for departure: 

Other research can include browsing the XYPN Find An Advisor portal, LinkedIn, and social media, and signing up for other advisors’ newsletters and content. This will help you identify what kind of targeted marketing advisors engage in, and what kind of content they deliver to their prospect list, and that will help you define the kind of advisor you want to be when you start. 

Head over to their website for more inspiration: you can review their pricing pages, their “About Me” sections, and their resource tabs to get insight into how to design your own website and service model. Check out their ADVs, and see what kind of services they’re offering, and how they frame them.

Last but not least, head to your state’s regulatory website and do a little research about what it will take to start your firm. You can begin looking at any net capital requirements, and what documents they require. But be wary: You will likely get overwhelmed with what you’ll find on those websites - they make them intentionally confusing. Don’t let your insecurities grow here. At XYPN we have helped thousands of advisors navigate their compliance, and we can help you too. From the initial registration process to annual ADV updates and moving into SEC registration, we’ve got your back. We encourage you to start looking at our compliance offerings to become more familiar with what level of support you may need when you become a member. 

You’ll also want to continue to refine your “why” for your firm. This will help educate who you will serve, how, and for what price point. Here are some questions to ponder:

  • What are you building for?
  • What does success look like?
  • What’s your ideal week and month?
  • Who gives you energy?
  • Who can help you reach your goals?

Looking for a roadmap to start your own independent RIA? Check out our  comprehensive guide to starting your firm!

#3. Consider Your Timing and Runway

We get it. Designing your logo and thinking up your elevator pitch feels way more fun than deciding what day you will resign. But you must define your timeline, plan your transition, and execute all of its parts. There’s a lot that goes into your timing and your runway, so buckle up.

XYPN has several incredible resources that help you plan your runway and timeline. Download our First Year RIA Budget with templates, to help you take an honest inventory of where you are—and where you need to be—financially and personally. You need to think about what you can afford in terms of income (or lack thereof), and what timing works best for you and your family.

Be aggressive and realistic in your projections: we know that advisors who have 2 years of living expenses saved up before they launch give themselves a lot more leeway and time to build than those who try to do it in 6 months. The first few years of your business are the hardest, and the last thing you’ll want is a dead-end date that’s quickly approaching   We see from the benchmarking survey that building the business takes time to build. Respect that, and plan for that.

When it comes to the actual conversation to resign, some advisors delay their resignation because they feel like they have unfinished business, or owe their employer something. If you have a bonus coming up, maybe wait until that payout, but don’t wait until your boss is in a better head space, or the firm has managed to hire that extra help they can’t seem to retain. Part of being an employee is that you don’t have those responsibilities. We encourage you to be respectful but also honor your personal and financial desires and needs.

And then there is the counteroffer: Be prepared for one. We see it time and time again with employees who go to leave their firms: Their bosses offer them 50% more salary, and more time off. My philosophy, which I now share with others, is that the offer is offensive at that point. We should not be working at a company that would have been willing to pay us 50% more but never did. It’s a bad sign, and it shows how badly they want you. Use that as an ego pat, and move on.

And then there’s the immediate firing. You will likely know from your research in Step 1, to know if you could expect an immediate fire. So be ready if it’s in the cards. That means you’ve done your runway projections, prepped yourself financially and emotionally, and you’re getting ready to submit that XYPN membership. How to prepare for a firing could be its own blog. But rest assured, within XYPN, you’ll have people that understand, and who have been through it.

We recommend joining XYPN 3 months before you want to begin the 6-12 week registration process. This lets you explore our resources, attend our programming, and engage in the community so you can start putting together your strategy. You’ll have the opportunity to ask members in your state about the registration process. You’ll be able to attend XYPN Compliance Office Hours to understand your state process timeline and ask any questions you have along the way (heads up Washington, Florida, Kentucky, Massachusetts, Nevada, and Minnesota residents: the registration process could take a lot longer, Eek!).

Planning and executing your exit strategy can feel daunting, but doing it thoughtfully will be its own reward. By being prepared for the many curve balls that come your way (an offer from your employer, or an extended registration period), you’ll more confidently walk into your new firm. We at XYPN have built our entire service offering around supporting those of you who want to make this leap, and we’d be honored to help you do the same. And then celebrate you when you build the firm of your dreams.

To get you there, check out my exclusive Launch Consulting service offered only in our Essential and Power Launch Kits. After you make your exit and turn your focus to launching your practice, I’ll be there to help you transition from dreaming to doing. Setting you up for success at every step is my primary mission in my new position as an Executive Business Coach. 

Your firm, your terms. It can be done. Show me how.

Maddy Roche Headshot

About the Author

As XYPN’s first employee and XYPN Radio host, Maddy Roche has seen, heard, and helped thousands of financial planners during every phase of their entrepreneurial journeys. For almost 10 years, XYPN members have looked to Maddy to buoy them with her unparalleled energy, expertise, and compassion. In doing so, she has become one of the most sought-after resources for members seeking motivation and mentorship to meet the demands of entrepreneurship. In her previous roles as XYPN’s VP of Getting Shi!t Done and Senior Director of Member Success, she helped build and lead the departments that deepen XYPN’s membership value. Today she brings all of that expertise directly to those seeking help to launch and grow their RIAs as an Executive Business Coach.

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