The Real Breakeven: How Many Months Until an Independent Payout Beats Your Grid
You have already seen the flattering version of this math. A recruiter's grid comparison puts your ~42% wirehouse payout next to a ~65% independent take-home, multiplies the gap by your production, and calls the difference your raise. The number is real. What that slide leaves out is when you actually collect it — and that the single input that decides the whole thing isn't your payout rate at all.
The honest breakeven isn't a payout gap. It's the month your cumulative take-home as an independent finally catches up to what you'd have banked by staying — after a Year 1 that runs slower and lighter than anyone models. This page walks the inputs, gives you a worked example to run your own numbers against, and is blunt about the two that trip people up: the revenue ramp and, above everything, retention.
The inputs, and why each one moves the answer
Six numbers drive a real breakeven. Most calculators expose three and hide the rest inside optimistic defaults.
Current gross production
The base everything scales from — your trailing-12 gross dealer concession. This is the one number you already know cold, so it's the least interesting. It sets the size of the swing, not the direction.
Current payout rate
Your effective cash payout on the grid, which for a typical mid-book advisor lands around 40–45% — not the headline grid number. The realized rate sits below the published grid once small-household penalties and deferred-comp haircuts come out. Use what actually hits your pay, not the schedule on the wall.
Deferred comp at risk
Unvested deferred compensation you forfeit by leaving is a real, immediate cost of the move — money already earned that you walk away from. It doesn't change your ongoing economics, but it deepens the Year 1 hole and pushes breakeven out. Get the unvested figure from your own statements, not an estimate.
Transition capital forgone
This is the input the recruiter frames as free money, and it isn't. A competitive wirehouse recruiting deal runs roughly 300–350% of trailing-12 revenue, but it arrives as a forgivable loan on about a nine-year term, taxed as ordinary income as it forgives, and forfeitable if you leave early. Walking to true independence usually means no upfront check — you forgo that capital in exchange for a higher ongoing payout and equity you own outright, since an independent RIA is valued around 2x revenue and is yours to sell. The breakeven has to carry the weight of that forgone check on one side and the equity you're building on the other.
Expected client retention
How much of your book's revenue actually follows you. This is the input that dominates the model, and it gets its own section below because nothing else comes close.
Expected independent cost structure
Your ongoing overhead as an owner — compliance, technology, E&O, custody, and any staff. A bare solo shop runs roughly $25,000–$40,000/yr; add one admin and the floor climbs to $85,000–$120,000+ loaded. It matters, but as the retention section shows, it is not the input that decides your outcome. Most people spend their anxiety here and underspend it on retention.
A worked example in place of the calculator
The live version of this page carries an interactive calculator; here is a static worked example that runs the same math on representative numbers, so you can see the shape before you plug in your own. Take a $1M-production book on the grid at a 42% payout — a $420,000 take-home to beat — going independent at a 65% take-home on the revenue that actually follows you, with a conservative ramp and no upfront deal:
| Retention | Independent annual take-home | Surplus vs. grid | Months to breakeven |
|---|---|---|---|
| 95% | ~$617,000 | +$197,000 | ~11 |
| 80% | ~$520,000 | +$100,000 | ~20 |
| 70% | ~$455,000 | +$35,000 | ~38 |
The live calculator is illustrative — a directional model, not a projection. The point is the shape: every step down in retention costs you more months than any cost cut buys back.
Retention decides this, not cost
Here is the part the grid comparison can't show you on a single slide: the spread between a good retention outcome and a mediocre one swings your breakeven further than any cost line you could cut.
Take a $1M-production book. On the grid at a 42% payout, your take-home is $420,000. Go independent at a 65% take-home on the revenue that actually follows you:
- At 90% retention: 0.65 × $900,000 = $585,000
- At 75% retention: 0.65 × $750,000 = $487,000
That 15-point difference in retention is worth about $98,000 a year — larger than the entire realistic overhead floor of a solo shop. You could run your independent practice with zero staff and the tightest tech stack in the business and still not claw back what a mediocre retention outcome costs you. Cost discipline is a rounding error next to keeping the households.
Retention is also where the well-sourced numbers land lower than the pitch. Cerulli's asset-loss figures on a firm change run about 22% moving broker-dealer to broker-dealer, 18% broker-dealer to independent, and 11% independent to independent — on top of any planned attrition, and higher for advisors leaving a firm that isn't in the Broker Protocol. Model 80% retention as your base case, not the 90%+ a recruiter quotes off "targeted assets."
The full sensitivity, months to breakeven against that same $420k grid take-home, $1M book, 65% independent take-home, conservative ramp, no upfront deal:
| Retention | Independent annual take-home | Surplus vs. grid | Months to breakeven |
|---|---|---|---|
| 95% | ~$617,000 | +$197,000 | ~11 |
| 90% | ~$585,000 | +$165,000 | ~13 |
| 85% | ~$553,000 | +$133,000 | ~16 |
| 80% | ~$520,000 | +$100,000 | ~20 |
| 75% | ~$487,000 | +$68,000 | ~26 |
| 70% | ~$455,000 | +$35,000 | ~38 |
Read the bottom two rows carefully. At 70% retention the move still wins eventually, but "eventually" is three years out — long enough that the wrong retention number turns a good decision into a grind you didn't sign up for.
Where FastTrackr fits
Retention is the most sensitive number in this model, and it turns on how fast the book gets serviceable. FastTrackr builds every household from the documents you and your clients already have, fills every form, and stages them for signature — so day-one service across the whole book is realistic, not aspirational. Move the reconstruction from weeks to days and you move retention up, which moves breakeven in by months. It's the highest-leverage lever the calculator has.
The first two quarters run slower than you'll model
The second place breakevens go wrong is the revenue ramp. Almost everyone draws it as a step — you leave, the book arrives, billing resumes. It doesn't work that way, and the gap between the step you imagine and the ramp you get is most of your Year 1 hole.
Here is the default this model uses, stated plainly so you can argue with it:
Assume you bill on assets. Roughly 0% is billed in months 1–2 while accounts repaper, ~50% of retained AUM is in place and billing by the end of month 3, ~80% by month 6, and ~95–100% by month 12. That collects roughly 65–75% of a full year's retained revenue in Year 1, with Year 2 the first clean full year.
This is deliberately conservative, and it should be. The optimistic benchmarks you'll see — a supported transition claiming most of the assets moved by month two — measure assets that eventually transfer, not fees you've actually billed. Two things slow the cash below that ceiling: repapering is a chain of per-account events (open, paperwork, not-in-good-order fixes, client sign-off) that realistically runs 60–90 days and often longer, and advisory billing is typically quarterly in arrears, so even a transferred account generates no fee until the next billing cycle turns. Assets on the platform are not revenue in the bank.
Model the ramp like a step and your breakeven looks a year too rosy. Model it like this and you'll set aside the runway to survive the trough instead of being surprised by it in month four.
The headline number is free; the full picture is what you unlock
A word on how this tool is meant to work, because the honesty of the gate is the point. The first answer — your headline months-to-breakeven — is ungated. You run it, you see it, you owe nothing. That's deliberate: a calculator that demands your email before it tells you anything has told you it doesn't trust its own number. An ungated first answer is what makes the rest feel fair.
What sits behind an email is the detailed multi-year output: the full cumulative-cash curve, the Year-1-through-Year-5 comparison with your deferred comp and forgone deal carried through, the retention sensitivity run against your book, and the equity-value line the recruiter math omits.
Where this leaves you
Two things get harder than the pitch admits, and they're the same two the model makes you confront. The revenue ramp is slower than anyone models, so Year 1 is a trough you fund, not a raise you collect. And retention — not your payout rate, not your overhead — is what decides whether breakeven lands in month 13 or month 38.
If your number pencils, the next question is what actually changes when you own the practice: Wirehouse to Independent is honest about the compliance, brand, and operational load the grid comparison never priced. If you're still weighing routes, Every Path Out puts all of them side by side.
