Advisors reported that 43 per cent of their clients were "initially surprised," but ultimately supportive, while only 18 per cent were concerned at first but eventually supportive, the study by Fidelity Investment found. 

“One of the most rewarding parts of our transition to independence was the reaction from our clients,” said Greg Erwin, co-founder and partner of Sapient Private Wealth Management. “They really responded to our new way of looking at their portfolios.”

Overall, the study revealed that over three-quarters of financial advisors who changed to an independent business model claimed they are now “better off financially.” Of those, 64 per cent said they were better off within six months of their move.

In addition, over half of advisors made the move “without any strong influence from others or a written plan,” having explored an average of two or three business models beforehand, while 80 per cent made the switch alone and 20 per cent moved as a team.

“Advisors of all sizes are defining independence on their terms, and reporting financial success as well as personal satisfaction,” said Michael Durbin, president of Fidelity Institutional Wealth Services.

“What is most critical in exploring independence is that advisors understand their options and choose the right fit - whether that is starting an independent advisory firm, joining an independent broker-dealer or creating their own model,” he said.

However, 58 per cent of advisors reported “some complications” in terms of the transition process, explaining that it was “somewhat or extremely difficult to re-paper their clients’ accounts,” the findings revealed.  

“This study validates what we have been seeing in the marketplace. Advisors seeking independence are interested in the flexibility to design their practices, choose their products and define their brands. And, they are open to exploring a variety of business models,” said Sanjiv Mirchandani, president of National Financial, Fidelity’s clearing and custody company.

The study was conducted in collaboration with Cogent Research between 26 September and 13 October last year.

The 173 participants involved had become independent within the past five years, with a minimum book of business of $10 million in assets under management.