Benefits of Choosing an Independent Investment Advisory Firm in Today’s Economy

December 21, 2008

By Philip Brice, AIF®, Principal of Elliott Davis Investment Partners


The epic collapse of Lehman Brothers’ marked a stunning turning point in the financial markets from which Wall Street is still recovering.

When investors woke up on Monday, September 15, the landscape had totally changed: Lehman Brothers was bankrupt, Merrill Lynch was sold, and the credit markets – which had been improving after Bear Stearns’ bailout in March – were, and still are, in crisis.

To add fuel to the fire, 2008 marks the first time that all economic indicators are negatively trending.  Stocks, bonds and real estate are down, corporate layoffs are rampant, consumer spending has dwindled, and overall confidence is at an all-time low.

The spontaneous combustion of these issues has left investors with a multitude of questions about what the financial future holds for their families and businesses. Coupled with the economic collapse of many of the world’s most recognized and respected financial brands, many investors are also confused about where to turn for answers. 

The current lack of confidence in many of the well-known banks and brokerage houses is one reason, among many, for the growing popularity of independent investment advisory firms.

The shift towards independent firms can be attributed to younger investors – those between age 35 and 54, as well as attorneys, physicians, dentists and senior corporate executives, who are all more likely to choose an independent financial advisor over an affiliated advisor based on recommendations from their peers..

Adding to the allure of independent firms versus affiliated advisors are the comprehensive services that independent firms can provide over banks or brokerages.  Since independent advisors aren’t compensated for selling an employer-branded product, independents can provide clearer, more objective advice to clients.

The type of advisor is also a factor in each investor’s decision whether to opt for the independent or affiliated model. Investors who prefer working with independent advisors often look to accountants, independent financial planners and registered investment advisors as their primary advisors.

At many independent advisory firms, investors have access to certified financial planners, certified public accountants, accredited investment fiduciaries, chartered financial analysts and operational professionals, bringing varied perspectives to each client engagement. This team-focused, individualized approach to financial planning allows for the provision of customized objective and competent investment solutions for all firm clients – individuals, companies, endowments and foundations.

In my professional experience serving as an affiliated investment advisor with one of the largest bank brokerage firms in the country, and as an independent investment advisor and principal with Elliott Davis Investment Partners, I have found that full-service, experienced independent firms like the latter can serve as an unbiased, one-stop resource for a variety of individual and business needs.  The team-based approach to financial planning not only differentiates the independent investment advisory firms – it helps clients achieve their objectives.

As one of the financial industry’s leading publications, Financial Planning reported, “With all the choices at clients’ disposals, the bottom line may be that in the debate over independent and affiliated advisors, satisfaction levels simply run higher with the independents.  And satisfaction leads to loyalty – the Holy Grail of advisory services.”


About the Author
Philip H. Brice, AIF® is principal of Elliott Davis Investment Partners. He has more than 25 years experience as an investment advisor providing investment advisory services to high net worth clients, corporate retirement plans, endowments and foundations. Brice co-founded Hamilton Joseph Investment Consulting in 2002. Prior to that, he served as the consulting group director with Smith Barney.  He earned a bachelor’s degree in business administration from Presbyterian College.