How to Become an Independent Financial Advisor

Becoming an independent financial advisor can offer more freedom and flexibility in how you serve clients and build your business. By 2027, independent and hybrid RIAs are expected to control nearly one-third of asset market share, growing at a faster rate than any other advisor channel, according to Cerulli Associates. ¹ Advisors pursuing independence may choose from several different business models, including launching a registered investment advisor (RIA) firm, joining an independent broker-dealer or affiliating with an RIA aggregator.

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Independent Financial Advisor Models: Which Is Right for You?

What it means to be an independent financial advisor is ultimately defined by the advisor. There are several models that financial advisors may choose from when making a move to independence. Here are four common models to consider.

Before choosing a model, consider both your short-term resources and your long-term business goals. While you may be mentally ready to launch your own firm, for instance, you also need to consider how much time and money you’ll have to invest initially to get up and running.

RIA startup costs can average around $25,000, ² although costs can easily run anywhere from $10,000 to $50,000. If you’re unable to bootstrap most of the funds you’ll need, you may need to consider your options for obtaining a startup or small business loan. A carefully planned budget can help you estimate exactly what you’ll need. A typical timeline for starting an RIA, meanwhile, can be anywhere from two to six months. 

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How to Become an Independent Financial Advisor

Assuming that independence means starting a firm of your own, there are some specific steps involved in the process. Here’s an overview of what you can typically expect when setting up an independent advisory business:

1. Earn a Securities License

A securities license is necessary if you’d like to charge fees for financial advice and trade securities on behalf of your clients. Advisors who charge fees for investment advice often need to pass the Series 65 exam administered by the Financial Industry Regulatory Agency (FINRA), unless they qualify for an exemption. This exam qualifies advisors to sell certain packaged investment products, such as mutual funds and variable annuities.

You may consider taking the Series 6 or Series 7 exams, which are also administered by FINRA. The Series 6 exam tests your competency to run an investment business, while the Series 7 exam tests your ability and knowledge to trade securities. Depending on your business model and state requirements, you may also need Series 63 or Series 66 licensing.

2. Consider Additional Certifications or Designations

Additional certifications are optional, though they may strengthen your professional credibility. For instance, you may choose to pursue a designation as a Certified Financial Planner™ (CFP®) or a chartered financial analyst (CFA).

Holding these types of designations could give you an advantage when trying to attract new clients to your business. Prospects may be naturally drawn to an advisor who has a recognizable credential. Earning designations can have other positive side effects. For example, 84% of advisors who hold a CFP® mark report finding fulfillment in their careers, 83% say they are highly satisfied with their work/life balance, according to a 2025 CFP Board survey. ³

Keep in mind that these types of designations may require you to meet continuing education requirements to maintain them. Failing to meet CE requirements could result in a temporary lapse of your credential; an extended lapse may necessitate having to retake qualifying exams. 

3. Develop Your Business Plan

Creating a business plan is important as it can serve as a blueprint for building your new advisory firm. A comprehensive business plan encompasses your firm’s mission, values and goals, as well as your operational details, financial projections and marketing strategy.

Writing a financial advisor business plan isn’t a requirement for starting a new firm. However, taking the time to create a blueprint for starting and growing your business can help you set realistic expectations and build in contingencies for any potential setbacks you may encounter along the way. Having a business plan can also be helpful for planning your budget and mapping out your marketing strategy. 

Top-performing firms actively maintain documented plans that identify ideal client personas, client value propositions and marketing strategies according to Schwab’s 2025 RIA Benchmarking Study. ⁴ Those firms gained 67% more new clients and 68% more new client assets in 2024, compared to other RIAs.

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4. Register With Federal and/or State Agencies

Independent advisors must register with the Securities and Exchange Commission or their state regulatory authority before working with clients. Which one you register with can depend on the amount of assets under management you’re responsible for.

Here are the guidelines, as established under the Dodd-Frank Act.

Note: In January 2026, the SEC proposed increasing the small entity threshold to $1 billion, which could reshape the way RIAs are impacted by future rule-making.

Assuming that you’ll register with the SEC, you’ll need to complete Form ADV to do so. This form collects information about your firm, including the type of clients you serve, the amount of assets you manage and your overall investment strategy. Form ADV can be submitted online through the Investment Advisor Registration Depository (IARD).

If you’re registering with the state instead, you’ll need to contact the applicable regulatory agency to find out what paperwork you’ll need to file. An RIA registration consultant can assist you throughout the process. Consultants can guide you through the required documentation to ensure a smooth, error-free filing. 

5. Choose a Custodian

RIAs are required to work with a custodian in order to be compliant with federal regulatory guidelines. An RIA custodian maintains client assets on behalf of a registered advisor. You may need to do some research to find the right custodian to work with.

In doing so, it’s helpful to consider things like the support services a custodian offers, what type of tech tools they employ in managing client assets and how much they charge for their services. RIAs are increasingly looking for custodians that can deliver cutting edge technology, solid support and operational efficiency, according to the 2025 T3/Information Inside Software Survey. ⁵  

6. Assess Funding Needs

If you plan to go independent, consider how much you’ll need to budget for startup costs and where that money will come from. For instance, will you pull cash from your personal reserves or apply for a small business loan? Is an angel investment a possibility for you, based on the type of company you’re launching?

In terms of what it takes to get started, you’ll need to have funds to cover registration fees and exam fees if you’re seeking a securities license for the first time. You’ll also need to secure premises for your business, purchase office equipment and supplies and create a marketing budget.

Also, consider how you’ll cover your personal expenditures in the early stages. If you’re starting an RIA with zero AUM and zero clients, there may be no revenue for you to draw an income from for a set period. You’ll need personal savings, other income or access to financing to help you cover both your overhead costs and cost of living temporarily.

7. Develop a Client Acquisition Plan

If you’re leaving an existing firm to start one you own independently, your broker protocol may dictate which clients, if any, you can take with you. Developing a plan for acquiring new clients before making a move can help you hit the ground running right away.

You may not be able to take clients with you, but your firm may allow you to notify them of the change through a client transition letter. By providing them with the details of where you’re going, what you plan to do and why, you give clients the information they need to decide whether they want to follow you on the next stage of your professional journey.

Beyond that, a client acquisition plan can cover marketing, prospecting and outreach strategies that can help you drum up assets to manage. Your marketing plan may include:

• Social media content
• Email marketing
• Website and blog content
• Referrals and word of mouth
• Seminars
• Direct mail marketing
• Local marketing campaigns
• Digital ads

When marketing your firm, it’s important to emphasize your credibility and authority. Some of the ways that you can do that while increasing your firm’s media exposure include being a guest on financial podcasts, writing articles for online financial publications and offering to share your knowledge as an expert source for articles on authority websites.

If you’re having trouble attracting new clients, you may consider using an online lead-generation tool to connect with prospects. SmartAsset’s Advisor Marketing Platform (AMP) offers financial advisors services like client lead generation, automated marketing and more. Learn about SmartAsset AMP today.

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Frequently Asked Questions

Bottom Line

Becoming an independent financial advisor can create opportunities to build a business that reflects your preferred client experience, service model and long-term goals. Whether you choose to launch an RIA, join an independent firm or affiliate with a larger platform, success often depends on thoughtful planning, realistic budgeting and a clear strategy for attracting and retaining clients.

Tips for Growing Your Advisory Business

• Get help with your own marketing activities. SmartAsset AMP (Advisor Marketing Platform) is a holistic marketing service financial advisors can use for client lead generation and automated marketing. Sign up for a free demo to explore how SmartAsset AMP can help you expand your practice’s marketing operation. Get started today.
• Meeting compliance requirements is an important part of running your business and failing to do so could have serious consequences. There are a number of federal guidelines RIAs are expected to meet and new rules are introduced periodically. Hiring a compliance officer to manage things like reporting and recordkeeping can be a smart investment if you don’t have one on staff already.  

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