I asked 21 successful advisors and firm owners the same question:
If you were 20 again and knew your goal was to own a financial planning firm someday, what would you do?
There were multiple debates within the responses, but the one that stuck out first was:
Should young advisors pursue equity immediately…or get experience first?
Before beginning this project, I thought at least a few people would caution me against ownership entirely.
Not one of the advisors did.
On top of that, almost every student or early career advisor that I talk to seems to have a goal of ownership at some point.
So if everyone wants it, and everyone recommends it… when should young advisors pursue it?
The Case for Equity Now
On one side were advisors who believed ownership should happen as early as possible.
Their argument was: every client relationship you build is becoming either your asset or someone else's.
Spend five years developing relationships at a firm where you own your book, and you leave with a business. Spend those same five years at a firm that owns every client relationship, and you may leave with valuable experience, but no ownership at the end of the day.
Ownership compounds over time. The client you bring in during your first year may continue generating revenue throughout your career… either for you or someone else.
That client may also introduce you to family members, friends, and colleagues. Over time, one relationship can become several, and a legitimate practice quickly begins to build.
If the firm owns those relationships, that compounding benefits the firm.
If you own them, it benefits you.
"Start your own firm while you don't have a lot of major expenses and grind it out."
Several respondents pointed to the same advantage: your twenties may be the cheapest time in your life to take entrepreneurial risk.
Typically they come before mortgages, children, and higher living expenses enter the picture. You may have more flexibility to survive a few low income years.
Starting from scratch probably won't become easier when your financial obligations triple and other people depend on your income.
"There will never be a perfect time."
Starting young may not be easy… but waiting to start later doesn't make it any easier. It just opens doors to other problems.
The Case for Equity Later
Other advisors strongly disagreed with pursuing ownership first.
They think young advisors often underestimate how much they don't know.
"Learn, learn, learn… then make an ownership or partnership decision."
"The first three years of practical experience are so valuable."
School teaches us financial planning concepts. It can teach tax rules, retirement strategies, insurance analysis, investment theory, and estate-planning fundamentals.
It cannot fully teach implementation. No matter how many case studies you go through.
Knowing when a Roth conversion might make sense is different from knowing how to execute one correctly, communicate with the client's CPA, initiate it with the custodian, complete the paperwork, explain the tax consequences, and fix the problem when something inevitably goes sideways.
Even if you are capable of giving the best advice, you still need to learn compliance, technology, operations, marketing, hiring, billing, client service, and business development… often simultaneously.
One advisor recommended building experience before taking on ownership:
"Build a book from scratch, then finance a book after about five years… Experience is necessary."
Another suggested finding an established firm where the path to ownership already exists:
"Become a partner… and eventually take it over."
The thing is, becoming an exceptional advisor may be difficult when you are also learning how to run every other part of a business. Many see this as a reason to wait before seeking out ownership.
There is real value in making mistakes while working beside experienced advisors instead of making every mistake alone. At that point, you have your own clients, money, and reputation on the line.
The Problem With "Someday"
One of the most consistently criticized terms was "someday".
Several advisors cautioned against joining a firm based on vague assurances that ownership will become available "someday."
"Equity is solid, but without a near-term exit, it isn't worth much… Seek milestones that trigger income bumps or equity."
"Start your own firm while you don't have a lot of major expenses and grind it out. Or, if you can work for a seasoned advisor and get assurances up front that you can buy the firm over time."
The important part is that it is in writing. Saying "someday" is not a succession plan.
If ownership is part of the opportunity, young advisors should understand what that actually means:
- When does the opportunity begin?
- How will the firm be valued?
- What percentage can be purchased?
- How will the purchase be financed?
- What performance milestones must be reached?
- What happens if the current owner changes their mind?
- Is any of this written down?
A firm owner may intend to offer equity later, but intentions can change. Businesses grow, valuations increase, relationships deteriorate, and succession plans get pushed back.
Five years can disappear very quickly while you look forward to "future ownership" that never comes.
Equity Should Be Engineered
After reviewing all of the responses, the theme seems to be that the most important factor is being intentional about the path you take.
For some young advisors, that may mean starting a firm early and accepting the painful learning curve that comes with it.
For others, it may mean spending several years developing technical and practical skills before pursuing ownership.
It could also mean joining an experienced advisor with a written succession plan, defined milestones, a valuation method, and a realistic financing structure.
There is no universal timeline.
But there is a massive difference between intentionally delaying ownership to build the skills necessary to succeed and passively waiting for someone to decide you have earned it.
Experience has value.
Equity has value.
The danger is spending years creating value without being honest about who ultimately owns what you are building.