EP02 - The myth of independence

"Independent" is one of the most used and least examined words in our industry. Most advisors who call themselves independent are quietly very dependent.

In this episode, Steven Watts sits down with Founders Financial CEO Brad Shepherd and Chief Compliance Officer Joe Krcma to unpack how the meaning of advisor independence has shifted as the industry consolidates around mega firms and private equity capital. They argue that the real question isn't whether you're dependent — every advisor is — but whether your firm is a transactional utility or a genuine partner. The conversation explores the bifurcation of the industry, the warning signs of an eroding firm relationship, and why Founders frames its model as interdependence rather than independence.

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Transcript

SPEAKER_00 0:00

From Founders Financial. This is the Built By and For podcast. Partner-to-partner conversations for independent financial advisors. Today, host Steven Watts, Chief Growth Officer at Founders Financial, sits down with Brad Shepherd, CEO, and Joe Kirchman, Chief Compliance Officer at Founders Financial to discuss what independence really means in 2026 and the case for interdependence. Independent is one of the most used and least examined words in our industry. Most advisors who call themselves independent are quietly very dependent. Here's the conversation.

SPEAKER_02 0:41

All right, guys, thanks for joining me today. Uh appreciate you guys uh taking the time out and having this conversation with us. I'm here with uh Joe Kirschmar, our chief compliance officer, and Bradley Shepard, our chief executive officer. So thanks, gentlemen, for joining me absolutely. Thank you. I think we got a pretty cool conversation today. This idea of of independence and the pursuit of independence that you know financial advisors are taking out there. And does this still mean the same thing today that it that it meant in the past? And is it changing? Is it evolving? You know, is it gone? Right. So I want to get into that today. And I think I got the the right two guests to help me have that conversation. So let's get into it.

SPEAKER_01 1:15

Glad to be here. So yeah.

SPEAKER_02 1:16

Yeah. So Brad, let's start with you. Um what does independence for a financial advisor mean today? In a couple words.

SPEAKER_01 1:24

Yeah, I mean, I think the uh you always start with the idea of the spirit of independence. Yeah. Uh and the pursuit, and the and the idea that I'm gonna go independent is is, you know, you could argue it goes all the way back to the founder of our country, right? The spirit of being able to have you know some degree of your own destiny and control in your own control. Um so the pursuit of independence as a standard of industry, I think, is alive. It's well, uh, it's it's uh well considered, and advisors, in my opinion, are best served in that pursuit because they can now build businesses and enterprises that actually reflect the things that are most important to them. But uh it now certainly comes with with different challenges than it probably did 20, 30 years ago, even 10.

SPEAKER_03 2:01

Yeah, for sure. Joe? Yeah, I would agree. I think independence is is fundamental to being a good advisor. Um, you're not chained or restrained to what is in the client's best interest. You're gonna do what's in their best interest universally. Um so that I think that is the biggest draw to independence.

unknown 2:17

Yeah.

SPEAKER_02 2:18

And we're gonna get into allow this in more detail, but has the the meaning of independence has it fundamentally shifted over, let's just say, the last decade?

SPEAKER_03 2:26

Um I yes, I would say it has. Um because the industry, the the independent advisor industry has shifted. Um, you know, that it's kind of barbelled. Um, you know, you have mega um independent advisors and you have boutique independent advisors. Um and I think that's where this industry is gonna end up. And so the the concept of independent is either you're part of a mega firm that is you wanna be hands-off, you want to be kind of I'll say left alone um and be independent of everything and everyone, uh, or you're gonna be in a boutique firm where you're gonna be more um joined with that uh parent company, you're gonna be in relationships, uh, you're gonna be more known on both sides of it.

SPEAKER_01 3:08

Yeah. Yeah, and Steve, you know, my my uh probably different view on this. I actually don't think that independence is the right, the right characterization of the relationship advisors have with their firms. Um for many in our space, independence, if you're getting to the the truth of the matter, they'd be their own broker dealer, they'd be their own RIA. And uh the fact that they are connected to a broker dealer or an RAA firm would would make one argue that they're more dependent than they are independent. And so I think it's always been a misnomer. I don't think the independent space has served advisors well because of it, as you know. And so to me, uh the pursuit of independence, that you can do what you want when you want to do it for the clients that you are blessed to serve is is the right mindset. But I think it's the most important it's ever been to find a partner uh in the in the pursuit of your independence. And so, as you know, founders, we believe that's called interdependence. And uh we just think it's a it's a better way to consider what the true nature of a relationship is ultimately. Uh and so independence um in spirit and it sounds great, uh, but for most advisors, it's they're they're not. They're they're connected to the systems, uh, they're connected to the service models, they're connected to the technology uh that the firms they have, in theory partnered with are offering.

SPEAKER_02 4:27

Yeah, there's there's a misconception, I think, that that exists in the world in terms of what is an independence actually means. And this independence to me is this this this aspirational idea, and going back to what you said from our founding days, right? This this uh human human evolution itself is this idea of wanting to be independent and strike out on your own and this mindset, this spirit. But how it works in our industry and how it works in reality, there's maybe a misconception around that definition. So we're gonna get into that today. But the way we think about independence, the way advisors think about independence, right? Put yourself in their shoes for a second. Do you do you think it's is that that idea, that concept is under threat? Do you think it's um or is it just simply evolving?

SPEAKER_01 5:09

I I don't think the idea of independence is under threat at all. Okay, but I do think that it's more complicated to own or run an independent practice uh anymore. Um, you know, the regulatory environment, uh the need for systems and processes and technology. Uh and the reality for independent advisors is when they go independent, they choose the path that they know will help them best serve their clients, but they kind of by default become accidental business owners. And so in many situations, what an independent advisor is dealing with is the complexity of not just delivering wonderful, thoughtful leadership and advice, caring for a relationship. You know, that's a very minor part of their time, actually. They spend a majority of their time independently uh managing teams and thinking strategically about how they grow their practice and doing lots of things that have nothing to do with actually delivering world-class financial advice. Uh and so that conflict is is ever present. Uh and so I don't think it's I don't think independence by default is under attack or uh as a standard is the wrong way to think about it. But I think advisors are waking up to the reality that if they're gonna grow, uh, they need to think more thoughtfully and intelligently about how they run a practice, not just deliver advice.

unknown 6:20

Yeah.

SPEAKER_03 6:21

Anything you add on that? Yeah, I I I agree with him. I don't think it's under threat. I think it's it is evolution. I think um as the independent space is is becoming more technology driven, um, there's more opportunities and there's more difficulties that you know someone that's quote unquote independent has to be prepared to deal with. Yeah.

SPEAKER_02 6:40

I mean, my perception is kind of looking at things, and I'm wanting to get your guys' thoughts on this, is the the the role of which I may say it this way, the relationship between firm and advisor, that to me is drastically changing. Uh and and correct me if I'm wrong on this, but it seems like it's it's it's drastically changing. And it's getting as firms are becoming bigger and mega firms and they're they're they're gobbling up you know for scale purposes, right? It seems like the relationship is just uh it's changing. And it's the the idea of of independence, especially with a partner, that that whole thing is very different than it was 10, 15, 20 years ago, maybe more. So I'm curious what your thoughts on it. How how uh how are you seeing that? How are you seeing the the relationship change between firm and advisor versus what it was 20, 30 years ago, especially nowadays where we're talking about MA and we're talking about, you know, how are we appeasing shareholders? Like talk to me a little about that.

SPEAKER_01 7:34

I think advisors are waking up to the fact that they've actually probably not had a real relationship with the firm that they work with. I think advisors are waking up to the fact that the relationship standard they hold for themselves and their clients, that they've some for some reason accepted that the relationship standard with that they have with their firm is fundamentally different. Um, they realize that uh the firm they've partnered with is nothing more than a utility, likely. Uh they don't really know uh much about them other than they're probably their GDC and assets under management. They don't know their enterprise dream, they don't know what gets them out of bed every single day. And as long as the the independent advisor accepts that as an as a reasonable standard, it can perpetuate. And the MA activity of our industry, candidly, uh I think advisors that are, you know, again, in theory independent are learning uh that um, you know, they're kind of pawns in the game of the merger and acquisition of private equity and venture capital, that kind of stuff. And their value is nothing but an economic one. And and even then, if you look at that specific firm, it's it's even marginal there.

SPEAKER_03 8:34

Well, I think that's I'm sorry. No, go ahead. I think that's the the biggest difference. You know, you you you pose the question 20 to 30 years. 20 or 30 years ago, the whole venture capital, private uh money being put into uh independent space didn't exist. Certainly not to the scale of the past 10 years. And so to Brad's point, um the the actual advisor is nothing but uh uh a utility of a larger what's my return on investment? You know, that if you're being backed by private equity, there's an expectation of return. And so those firms need to do whatever it takes to appease those venture capitalists.

SPEAKER_02 9:11

Yeah. You said I mean you said it earlier that the um if you were truly independent, you'd be your own broker dealer, your own RA. And most are not, right?

SPEAKER_01 9:18

So um and candidly, nor do I think most should be.

SPEAKER_02 9:22

Correct. Right? Right. So when you know, when you know you're you're the firm you're you're a part of, when they're you know purchased by someone else and you go along with that, that that asset transition, right? You are in that definition not really independent, right? You were bought and sold. Now you have the option to leave, yes, right? And that in someone makes you exercise your independence, right? But in many ways, I think that's that's rubbed advisors the wrong way. And they could they've seen, especially if they were part of an organization that was that was that they they were comfortable with, they they really loved, they had that relationship that you spoke about, and now all of a sudden they don't. And we've seen example of that, you know, last year. There's a big one hanging out there that I think everyone can read into. So, you know, uh the the the MA landscape and and that that that has really changed the uh the the way I think a lot of people think about independence these days.

SPEAKER_01 10:11

And it goes back to the very inception of our organization. Um, you know, 20 years ago, uh we made the decision, and I look in hindsight really a courageous one to not accept that status quo as the as the ultimate end game that we all had to follow. Uh and we launched this organization uh because we were tired of the lowest common denominator. We were tired of the big firms, you know, just being uh a law of a law of large numbers kind of kind of firm where you know the people that we're serving don't know you. Um, you know, and and so we made the decision to go not roll up, but to roll out. Um and and you know, the the history says that was the right decision for sure. Uh and the ability we wake up every single day to now go pursue authentic, legitimate, honest relationship, kind of get in the foxhole with each advisor and help them grow businesses of purpose that reflect their heart and their character, that reflect who they are and what's most important to them. I mean, that's what we fight for every single day. Um, I don't understand, and you know, maybe it's my my small mind, but I don't understand why advisors have accepted um that uh garnering no attention is an acceptable standard. Uh and the reality is in the big firms, um, unless you are a certain level of seven-figure and higher GDC, you just you just don't garner attention as long as you fit into the service model that they've built for you.

SPEAKER_02 11:35

I'm gonna tee you up here because I've heard you say this before. I mean, uh why would you accept a relationship from your firm that you know that's different from the one you give to your clients, right? So that's exactly right. Yeah.

SPEAKER_01 11:45

It's an it's it's an interesting question. And I've been asking the question of advisors for 20 years, and you know, to this day, no one's actually giving me a good answer because they've never really thought about it. Yeah. They all go, hmm, wow, yeah, I've never really thought about that.

SPEAKER_02 11:56

Uh maybe I should think about it. You accepted the world we live in, and it's it's maybe tough to challenge it, right? But when advisors do challenge it, right? And and they they can get that they get comfortable.

SPEAKER_03 12:06

They comfortable, they get comfortable, change is hard, um, or at least it could be perceived as hard. Um, they kind of accept the status quo, and you know, yeah, the grass is always green on the other side of the fence, but everyone's got their warts, and they don't pursue it because it takes work. Yeah, yeah.

SPEAKER_01 12:22

So well, I was gonna say, and and that's not to say that these firms aren't delivering a valuable and good service. Um, and for for many advisors, maybe that's gonna be good enough for them. That's the right level of independence for them. Yeah, maybe that's the I think that's well said, the right level. Uh, I just have to believe that uh there's a lot of people that are in this business because the the quality the quality of relationship, the quality of an experience is is so important, and to have a partner um is is differentiating.

SPEAKER_02 12:54

Yeah, so that's a that's a good segue because if you're if you're independent, but you're not gonna be your NRA, you're not gonna be your MBD, right? Is independence now more about choosing the right partner to pursue this path with or rather than trying to go it alone?

SPEAKER_01 13:10

Yeah, I think it actually always has been, but I think that decision is more stark than it's ever been. Agreed. Because the motivations are now different. Uh I think when you look at the landscape 20, 15, 10 years ago, even, uh, and the the broadening of choice, um, size of firms, delivery of services and value prop, technology, all the things that uh a an independent financial advisor wants and needs to grow uh as I like to call this servant-rich, purpose-led financial planning enterprise, right? It's more than just, you know, selling agreements and custody. It's so much more than that. And as we look at that, how it's morphed over time, I think the choice is as important as it's ever been because um 10, 15, 20 years, there was lots of excellent choices. Um there's a lot less choice today. Um, and so I think advisors have to make the decision are they willing to accept what is now a, I would say, status quo that for me personally wouldn't be acceptable if I was an independent advisor, or do I actually want to, you know, be courageous and kind of have be willing to embrace change, Joe, as you were just talking about, and go pursue what actually aligns not just what I need for my practice, but who I am, what's important to me, and and having a real partner to go um help me grow.

SPEAKER_03 14:28

Well, and on that same note, I'm 10, 15 years ago, not only has the the industry changed with what's available and mergers and acquisitions, things of that nature, but technology has changed. So for a boutique firm, you're on a much more level playing field than one of these mega firms due to technology. Um you the technology has leveled that. It's a commodity just like any other commodity. And what's offered at a boutique is not gonna be that different than what's offered at a mega firm from that technology basis.

SPEAKER_02 14:59

We we've seen this this MA trend, you know, be be rampant over the last couple of years, right? And and I think there's a lot of people who would say that it's it's not gonna necessarily stop anytime soon. It may dip off a little bit, but generally it's it's been a pretty big practice. Um Do you think that's hurting advisors right now? Do you think there's a lot of advisors that are negatively impacted by this? Or is it this industry consolidation you know better, you know, in the long run?

SPEAKER_01 15:24

Yeah, I I don't think it's hurting advisors. Um I think it's stunting advisors, if that makes sense. And there's a difference. Hurting would imply that they're worse off for it. I don't think they're worse off for it. I just think they uh as a result don't have the same opportunity to go achieve something better, greater, um, more impactful. And so it's it's a standard of acceptance of and the pursuit of excellence conversation. Um, it's the standard quo conversation, you know, status quo conversation. So I don't think they're they're worse off. I just think that uh it becomes easier in this environment to become more complacent, uh less growth-minded, less impact-minded. And the beauty of what we get to do every single day in this industry is we get to unpack lives. Um, and so if I'm constantly, you know, having to reassess my world because the things I have no control over keep changing, it that yeah, maybe that means they are stunted a little bit.

SPEAKER_03 16:20

But uh, yeah, I agree. I don't think it's hurting them. I think it's disenfranchising them, I think it's it's disappointing them. Um, you know, we speak to uh members that they left the industry because what they thought they were going to be delivered and what they thought they were becoming a partner to wasn't. Um and they got disenfranchised with the whole industry. Um through one means or another, they come back to a firm like founders um and they say, Wow, okay, they're that is what I thought I was getting. Um so yeah, I I I agree with, but I don't think it was hurting them, but I think it certainly is is disappointing a lot what they thought they're getting, what they get.

SPEAKER_01 16:55

And I say that because I think to me, hurting means you're worse off. Yeah. I don't think they're worse off. I just think they uh things aren't as good as they could be, and they accept that.

SPEAKER_02 17:04

Um stair where if you're if you're part of a firm and you've got that that voice in the firm and you've got that seat at the table and you've got a great relationship with the executive team, and you feel like a you've got you've got some some some place in the the firm you're with, and all of a sudden that firm is bought up by by the largest in the industry, and all of a sudden you're you're way back the line, right? You're just way back there and you lose all that. Like I I could see the disenfranchising thing you mentioned, that the way that would impact me as a how I treat about it.

SPEAKER_03 17:35

You lose trust, you lose faith. Um, you know, the next one that comes along that says, nope, we are independent, we're fiercely independent. You you can't help but go, I've heard this before.

SPEAKER_02 17:44

So does this change how advisors think about when they look at different firms, right? When they're trying to choose whether they're gonna stay at one of their ads, because maybe it was just bought up and there's a good value prop there, right? Yeah. Does it change how evalu how advisors seem to evaluate culture, the operational impact, you know, how the business how the firm goes about their business when you know they've been involved in MA activity, um, whether on the purchasing side of it or the theory?

SPEAKER_01 18:08

Yeah, I I think unfortunately it does. I agree. Yeah. And and to me, uh one of the things that as I look into the industry that I feel, you know, kind of maybe a little sad for our advisors that they've come to accept this as acceptable, as the status quo is okay. Um and it's kind of a big sea of sameness. You know, if you think about the biggest firms in our industry, there really isn't that much different. They're not there's not much differentiating between them. Um and that's because they can only succeed as you as utility providers uh to the thousands and thousands, and in some cases, tens of thousands of advisors that they serve. Um, and so yeah, I I think I think ultimately um you know advisors have you know programs probably too strong a word, but but accepted that there isn't as much choice. And so I'm I'm not gonna go fight for it as maybe as I once would have. But I think Joe made a really good point earlier. I think the outcome all of this is you're gonna have two distinctly different choices in our industry. Whereas 10, 15, 20 years ago, it was much harder to discern choice and difference between all the different firms, um, sizes, scale, capacity, technology, services, resources, all that sort of thing. I think in the next 10 to 15 years, it's gonna be very easy to distinguish between a group of large utility-providing organizations that, you know, they're good businesses, um, but fundamentally they're gonna independence means alone, and firms like founders that are gonna be, you know, uh thriving because the things that would have made it more challenging for a smaller firm to deal with have been flattened and levelized because of technology, AI, a whole bunch of different things. And we actually get to go do what we've always done best, which is pursue uh growth relationships and and really be partners to something that's important. And so I think advisors are gonna have wonderful choices, but less choices than they once did. You know, and I that's if you look at just our whole world, our whole economy, it's probably true of most industries.

SPEAKER_02 20:00

Real quick before we move on to some other topics and before we wrap up, private equity.

SPEAKER_01 20:04

Yeah.

SPEAKER_02 20:05

Good, bad for the industry?

SPEAKER_01 20:07

Is it yeah, I I would say so? I'm American capitalist at heart. So you didn't say that. Yeah, and so yeah, I mean, you know that about me. So I I believe in the spirit of entrepreneurialism. I I think private equity plays an important role in the uh the global capital structure. Um, I think in our industry, it has also provided a reasonable role. Um, but it's also changed the nature of relationships and uh it's made advisors um become economic quotients to firms, um, not human or relationship quotients to firms. Uh and so I think private equity candidly um for our industry, probably for many, has been an acceptable, okay thing. I think for founders can be a wonderful thing because we don't have any, and we get to stand proud that we don't, and we're not going to take on private equity. And so, as an outcome of that decision, um, we will get to be a stark choice difference for advisors that want something different than what they're seeing happen in the headlines every single day within our industry.

SPEAKER_02 21:05

So, yeah, I've always kind of looked at it as a we have no con conflict of interest. We we have a very clear path.

SPEAKER_01 21:11

Yep.

SPEAKER_02 21:12

Our our mission is to kind of stand on its own. It's not, you know, um modified by any kind of outside noise and whatnot.

SPEAKER_01 21:19

So well, and then if we think the firms that have that have them as partners are good or bad, that's the wrong way to think about it. It's not that they're good or bad, it's just they have different choices, they have different demands. They're putting on them and they have different uh expectations of what success is defined as, right? And so in a founder's world, uh success is defined as a very simple question every single day. Did we make a positive impact in the lives of our member partner? Did we help them grow businesses of impact and purpose? Did we deliver on our promises that we made? And did we help them help people? And that's real simple. Yeah, we don't have a another whisper in the ear going, and oh, by the way, did the economic quotient of that thing work out so that I can flip this in five to seven years as a private equity ticket might flip?

unknown 21:58

Yeah.

SPEAKER_02 21:59

Perfect. Um, I'm gonna go back to something you were kind of touching on a little bit earlier and give it a chance to kind of give it a full explanation because I think that the right two people here for this. Interdependence, the founder's philosophy versus the idea, the well-known idea, the well-accepted idea of independence. Yeah. Talk about that and kind of how we think about interdependence as in contrast to the broader definition of what typical is independence in our industry.

SPEAKER_01 22:23

Yeah. And so along those lines, um I think that the honest characterization of the true nature of a relationship between an advisor, their practice, and their broker or RIA firm is that it is not an independent relationship. It is a dependent relationship. Um and so, and why do I say that? Because and and I say that in a good way. We're dependent on, we call the member partners here, on our member partners to go do what they do excellently, and they're dependent upon us to do what we do excellently. And that partnership creates a lot of wonderful scale and and amazing benefits. Uh, but the idea that we're independent of each other, um, it's just not true. It's just not it's just not true, right? Um, if they were independent, they wouldn't have a relationship with us, they'd be the BD either on our either on our eye, exactly. So so then if you take a look at the true nature of the relationship, it is one of interdependence. And so what we celebrate here at Founders is that. And when you begin to consider the lens of interdependence, where there is mutual respect, mutual accountability, uh, this strong desire to come every day to live up to a shared promise of what we've we've made to each other in this interdependent relationship. Yeah, it just it renders things different, better, easier. It's pretty cool.

SPEAKER_02 23:35

We need each other to survive, we need each other to do, to create the impact that you mentioned earlier.

SPEAKER_01 23:39

Yeah, we jump out of bed to help people every single day, our member partners so they can help their clients. Simply, it means that that we are a means to their end so they can be a means to their client's end. And that's that's the key. And I think our industry's got that backwards right now. I think you know, maybe I'll get in trouble for this one, but I think many advisors see the client as a means to their end. That's why some of the reputation of the industry exists. And I think many firms, candidly, as evidenced by all the merger and acquisition activity, see the advisor as a means to the firm's end, their economic quotient kind of a thing.

SPEAKER_03 24:12

So yeah, I think interdependence is all, and and Brad said this several times, is all about the relationship. Right. Um we need uh transparency and communication lines to all of those in our community, and they need it from us. We can't be working independent of each other. Independent of each other would not exist. It makes no sense as just a fundamental statement.

SPEAKER_02 24:33

So then so it's pretty clear. So if advisors want that kind of hands-off relationship, there is a great number of choices that make sense for them. The utility relationship is I'll say there's a number of choices. There's a number of them.

SPEAKER_01 24:43

I'm not sure I would say there's a great number, but there's a number of them. I'll go I'll go with that, right?

SPEAKER_02 24:46

So there's but if you're if you're you're kind of caught in the middle, right? Or or you want to think about a different choice for you, right? Then maybe the interdependence model works. What questions should those advisors be asking themselves when they're thinking about firms they may want to affiliate with?

SPEAKER_01 25:04

Yeah, I I I think qu frankly, there's two questions. What's most important to me and why? I know that's not some you know, grand long answer, but if I'm an advisor trying to decide, do I have the right partner, I'm asking myself the question, what's most important to me and why? And then the follow-up, of course, is now the you know the relationship that I'm in, does it does it deliver or not? Um and if it doesn't, yeah, then there's there's choices out there. If it does, awesome. Put your head back down and get back at it.

SPEAKER_02 25:35

Yeah, I think it's an element. It's like the is the the people that I'm connected with through this relationship, are they gonna be there for me when things get tough? Yeah, right. Like can I trust those? That trust element, right? If I'm an advisor and I have a compliance issue, am I gonna trust that Joe is gonna be here for me, right? Things like that.

SPEAKER_01 25:53

I think it comes down to this. I was at a conference two weeks ago, I was having a conversation with an advisor, and he referred to his firm as his friend of me. Right? That's interesting. Yeah. He referred to his firm as his friend of me, which makes sense. Yeah, I understood it. Um, yeah, I I personally, if I was an independent advisor, um, would not want or feel that that's the best place for me necessarily. Because all that implies is on one day they like me and I like them. On another day, we're we we're annoyed with each other. It's very circumstantial. Yeah, right. Exactly. And so I don't know. I would just personally pursue not being in uh and I and I just think that probably for many, many advisors in this industry, they see the firm they work with as their friend of me. Yeah. And that's just I don't know. That's to me unfortunate.

SPEAKER_03 26:41

Yeah, for me, it it's it's two questions as well. It's do we know each other? Does does does my RABD know me? Do I know them? And do we want each other? Yeah, do I want to be with them? Do they want to be with me? Yeah, um, and and and then back that with evidence. Yeah, here's evidence of both. And if that's there, okay. Yeah, what am I?

SPEAKER_01 27:03

If it's not, okay. One of my favorite stories over all these years um with Joe as our chief compliance officer, uh, we had uh uh an audit uh being done by you know national regulate regulator, and he he was called into a meeting, and they wanted to sit down and interview him about our our advisors, our member partners, our reps. And he walked in with no computer, no file, no nothing. And he sits down and the the auditor looks at him. Who's this guy? Yeah, Mr. Mr. Kirchner, you know, you do realize why we're here, right? He's like, Yeah, we're here to talk about you know, as you call them our reps. Um now there are member partners, but you call them our reps. Well, but don't you want I mean, don't you want to have a file? Do you want to have your computer? Um, and uh he's like, No, I'm I'm I'm good. Thank you very much. He's like, okay. And he asks, you know, well, tell me about, and I won't say the person such person, yeah. Yeah, and and Joe just beautifully just well, this person is, this is where they are, this is their business, this is their this is their wife, this is what they drive, this is the they they like to fly. I mean, like he knows them. And I'm pretty confident that the chief compliance officer of the mega firms or industry, um, one, wouldn't know, and two, frankly, probably don't care. Um, and I think that's the that's the bottom line. And so independence, this whole nature of this conversation is you know, why are you choosing independence, right? And you're choosing independence because you want your spirit filled with your the ability to pursue your your own matters of importance, your destiny, the things are most important to you. But at the end of the day, the choice is more stark than it's ever been. Don't want to choose that with an organization that will never know me, can't know me. It's impossible. The cards, there's just no possible way, unless I'm probably like that level of a producer and join whatever president's club or advisory council or some special thing I've been invited to. But for the for most advisors uh in our industry that that are in, you know, the towns across this country doing great work to help people achieve their goals and dreams and put their kids in college and retire and protect their families, all that kind of stuff. Yeah, I just I don't know. I think that the choice is as good and stark as it's ever been.

SPEAKER_02 29:04

Yeah, well said. A couple of rapid fire questions before we wrap up here. Um if you're at an existing firm and maybe you're you're feeling some turbulent waters there or whatever this might be, um, are there any warning signs that advisors should be thinking about that that maybe independence is eroding, the the the nature of that relationship is eroding a little bit? Like what should they be on the lookout for where maybe they want to start to explore and see what else might be out there?

SPEAKER_03 29:27

Yeah, for me, again, I I go back to relationship. Um, has the relationship changed? If you're at what was once a a mid-size, not a mega, but not a boutique firm, and you used to know the chief compliance officer on our first name. You used to call in and get a person when you called in for uh help on something. And recently you're not finding that as much. The the waters are changing underneath you, and you need to be grabbing those signals. Yeah. Yeah.

SPEAKER_01 29:51

Yeah, I I think that unfortunately advisors accepted it. I think they get signals every single day. They're they're in business with frenemies.

SPEAKER_03 29:58

Yeah.

SPEAKER_01 29:59

And so I I think that uh the question is the more the more I think effective question is at what point is it not tolerable to you anymore? That's a good point. You know, and so I think I think the reality is no firm's perfect. Yeah, no, none, including us. Yeah. Um, but uh yeah, it's it's do you do you trust the people you're you're hearing for things from? Do you have to you have to go back over and over and get to get things done? Do you have to so I I actually believe that for most um advisors that are inside of the big utility firms or industry, they experience this stuff on a daily basis and they just accept it as what's what's standard. Yeah, and that's that's unfortunate to me.

SPEAKER_02 30:36

Question is when do you stop accepting it?

SPEAKER_01 30:38

Yeah, that's that's the more important question.

SPEAKER_03 30:40

And unfortunately, it's usually a big moment. Some big customer complaint, some big regulatory event where the signals have been there all along that these guys are not gonna get your back. Now it's too late. Now you're going, man, now I got a real issue.

SPEAKER_02 30:54

Now it's a problem. Right. Yeah, yeah. That's a good point.

SPEAKER_01 30:56

Yeah.

SPEAKER_02 30:56

Five, ten years from now, because this whole thing is about the idea of independence, isn't it? Is it going away? Is it eroding, right? Is it changing? Five, ten years from now, in your opinion, what is independence for an advice for advisors look like?

SPEAKER_03 31:09

Um, it continues on the track it is. It's gonna be a handful, and I do think a handful, uh, much like the wire houses, of mega uh independence, and then there's gonna be boutique that, and you're gonna you're gonna choose as an advisor. Do I just I'm fine being, you know, calling into some center and giving them my rep number, and that's how they know me, and I get what I get from that as a utility, or do I want a relationship um at a much deeper level that's unique? And I mean, everyone's gonna be different in this.

SPEAKER_01 31:36

As Brad said the chasm's getting wider, yeah, right.

SPEAKER_03 31:38

Um there isn't gonna be that middle time.

SPEAKER_01 31:39

Choices are getting more stark, yeah. I I think independence in five to ten years doesn't look that much different than it does today. Um, I think the bigger question is um, given the evolving landscape of technology and and other things, that we're not here that well, that'll be for another conversation, I realize. Um but I think uh operationally uh advisors have an opportunity to um become the best they've ever been at the systems process workflows and things of their businesses so they can actually go do more work that they love, which is growing enhancing relationships. Um and so what will be interesting to see as this technology develops is how do firms allow, not allow, mandate, don't mandate, what kind of ecosystems do they let advisors adopt, not adopt, you know, those kinds of things. So I think independence, given the evolving technology footprint, will feel less independent. Um but the spirit of independence, I think is what I'm saying, will still be there in five or ten years, and advisors still have choices to make what's based on what's most important to them and what they want for their practices, their clients, and their businesses. But I do think that the uh the nature of what's happening, we're seeing the mass wirehouseization of our industry. Um and so I think ultimately advisors will feel less independent because uh forces that dictate scale, autonomy, efficiency of these big firms, um, they'll have they'll feel less freedom than they once did.

SPEAKER_03 33:01

And that goes back to Brad's earlier points of trust, right? I agree, that's gonna have to happen. Just cybersecurity is a good example of a great one. Um now, do you trust the person you're partnering with? Are they really looking out for me or they're looking for the bottom line? And and so that's gonna be a real key factor.

SPEAKER_02 33:17

Yeah, yeah. Yeah, real quick, you you guys may think of something as you were talking there. Can can small still succeed? Like, is small still gonna be around in 10 years?

SPEAKER_01 33:25

Yeah, I mean my my unequivocal answer to that is definitively yes. And candidly, I think we we're entering an era where um the things that maybe big had advantage over small back in the day, those those barriers are gone fundamentally. I think, yeah, I think we'll see uh in this entrepreneurial spirit of this country, I think we'll see even new independent firms launching that would not have probably because the ability to go deliver the operational, the technology, yeah, the systems that you have to have are gonna be the the easiest they've ever been to do.

SPEAKER_02 33:56

In many ways, what's happened is actually increased the value proposition for small. Yes, right? Yeah, absolutely. That that that bifurcation, that difference of the city. You need the passive staff to run everything. Yeah, I mean, the choice, as you said, is is so clear these days that you're you're gonna align one side or the other, right? And some people don't want that big, right, big kind of uh corporate, bureaucratic utility type of feel. They want to go somewhere where it's more intimate, and all those people do want that utility feel. So well, great guys. Um, awesome conversation. I really appreciate um the honesty and the candor and uh um yeah, just enjoyed having you guys on here. So wonderful. Thank you very much. Thank you very much. All right, Steve. Thanks. Thanks. All right, take care.

SPEAKER_00 34:37

Thanks for spending time with us on the Built By and For podcast. If this conversation resonated, follow the show on Apple Podcasts, Spotify, or YouTube, and share it with an advisor in your circle who's thinking about what comes next. To learn more about Founders Financial and our solutions for independent advisors, visit Foundersfinancial.com. The Built Buy and For Podcast is produced by Founders Financial. The opinions expressed by hosts and guests are their own and do not necessarily reflect the views of Founders Financial. Content is for informational purposes only and is not intended as investment, legal, or tax advice. Securities offered through Founders Financial Securities LLC, member FINRA, and SIPC, registered investment advisor. Copyright Founders Financial, all rights reserved.