Advisor incorporation “should have been the case all along” says CEO

Where incorporation can add real simplicity, White says, is in the management of advisory teams. Having operated his business under a partnership structure and a corporate structure, White says the corporate structure makes growth and management far easier.

The ease of doing business that comes with corporate structures, too, should result in better client service. White argues that if a corporate structure allows practices to onboard more staff, build career and succession paths, and allocate capital better then those efficiencies and advantages will result in better service to clients.

Making the decision to incorporate

For advisors looking at the new option to incorporate, White cautions against jumping in headfirst. For all the advantages it may bring to certain practices, incorporating comes with its own set of costs and headaches. Not to mention there is likely to be a long stretch of regulatory wrangling and compliance policy writing before even independent firms open up the incorporation option to their advisors.

Fundamentally, White believes advisors should approach their own decision to incorporate in much the same way they would if a physician client wanted to incorporate. They should look at their own lifestyles, their earnings, their spending, and ask whether a corporate structure benefits their overall financial lives. If an advisor spends all they earn, for example, then incorporation is likely not worthwhile. Applying their own planning expertise to this decision may determine its success or failure for an advisor.

“It’s not a slam dunk that this becomes a thing that every advisor is going to. You really should spend some time figuring out if it makes sense in your circumstances,” White says. “Recognize that there is a cost to setting it up and a cost to maintaining it, and it’s depending on your circumstance may not yield you any benefit.”