Independent Contractors

Independent contractor status has long been a cornerstone of the financial services industry. SIFMA supports efforts to preserve and protect the independent contractor business model for broker-dealers and their affiliated financial advisors.

Across the country, nearly 150,000 independent financial advisors are affiliated with broker-dealers that serve millions of clients. These professionals help families plan for retirement, fund education, manage risk, and build long-term financial security—often reaching underserved communities and clients with diverse needs.

For many advisors, operating as independent contractors provides the flexibility to own and manage their own small businesses – whether as sole proprietorships, partnerships, LLCs, or professional corporations – while maintaining full compliance within a highly regulated industry.

Broker-dealers provide the supervisory, licensing, and operational infrastructure necessary to execute transactions and maintain compliance under federal and state law.

Key Focus Areas

Preserving the Independent Contractor Model

SIFMA advocates for a regulatory environment that recognizes the unique structure and success of the independent broker-dealer model. This framework allows financial advisors to combine entrepreneurship with strong regulatory oversight, ultimately benefiting both advisors and the clients they serve.

Opposing the Misapplication of the “ABC Test”

Recent legislative proposals seek to apply the ABC test to determine worker classification. This overly broad standard, originally designed for other industries, fails to account for the distinct nature of financial advisory relationships and the extensive supervision already required under securities laws.

Applying the ABC test to financial advisors would create significant uncertainty for firms and could disrupt a model that has long served investors effectively.

Supporting Investor Access and Small Business Ownership

Independent advisors play a vital role in broadening investor access to professional advice while maintaining ownership and control of their practices. Protecting this model ensures continued diversity, innovation, and accessibility in how financial guidance is delivered to Main Street investors.

The Bottom Line

Independent financial advisors embody the spirit of small business ownership within a regulated profession. SIFMA is committed to preserving their independence—ensuring advisors can continue to serve clients effectively, operate responsibly, and contribute to the strength and reach of America’s capital markets.