FSI-Oxford Economics: New Jersey’s Independent Contractor Rule Would Cause Advisor Relocation & Decreased Access to Financial Advice

65% of financial advisors would consider relocating their business out of New Jersey

Change would result in a reduction in service and investment options, increased account minimums and fees

The Financial Services Institute (FSI) has released a study conducted with Oxford Economics analyzing the potential impact of the New Jersey Department of Labor & Workforce Development’s (NJDOL) proposed independent contractor rule.

Based on data from New Jersey-based independent financial advisors and recent research, the study found that the NJDOL’s proposed rule would reshape the financial advisory industry in the state and decrease client access to financial advice, all of which would impact the state’s broader economy.

Disruption to the Financial Advisory Industry

Independent financial advisors highly value their independence, with 94% of respondents saying they are very satisfied with their independent contractor status. Over three-fourths of independent financial advisors value owning their own business, and 62% stated that their independent contractor status allows them to better serve their clients.

If the proposed rule were to go into effect, 65% reported they would consider relocating their business out of New Jersey. Another 4% said they would retire from the financial advisory industry entirely. Only 8% would consider becoming an employee.

The survey found that the proposed rule would likely increase costs for independent financial advisors in the state, with 88% of respondents saying their costs of doing business would increase. Nearly two-thirds (65%) expected their legal expenses to rise. Even among advisors who would become employees, 44% stated they would incur some kind of additional costs.

Disruption to Clients

The proposal would also adversely affect advisors’ clients, with 91% of financial advisors expecting clients to be impacted by the potential changes caused by the proposed rule. Specifically, 67% expect a reduction in service, and 62% expect a reduction in investment options for clients. With three-quarters of advisors anticipating the proposal to lead to increased fees and 69% saying it would lead to increased account minimums, lower-income investors would likely be impacted the most. Additionally, advisors noted the changes would likely impact the level of service clients receive, particularly a loss of efficiency and personal service due to increased costs and advisor relocation.

Broader Economic Impact

Based on survey results and recent data, the proposed rule’s influence on the relocation and retirement of independent financial advisors would lead to the loss of an estimated 4,670 workers in the state. These advisors contribute approximately $470 million to New Jersey’s GDP and support 3,500 jobs. Additionally, this loss may result in decreased state tax revenue.

“This study makes clear what we’ve long known: independent financial advisors do not want to be employees, and New Jersey’s proposed rule would have a devastating impact on the independent financial services industry and Main Street investors who rely on it,” said FSI President & CEO Dale Brown. “Independent financial advisors are entrepreneurs and business owners who are dedicated to helping the members of their community plan for their financial future. Their independent contractor status affords them the freedom and flexibility to provide affordable, high-quality financial advice to their clients. This proposed rule threatens not only the businesses advisors have built, but also New Jersey families’ access to the advice they rely on to navigate life transitions and achieve financial security.”

Click here to download the full study.

Methodology

This survey was conducted by FSI and Oxford Economics in July 2025 via an anonymous link distributed by FSI. A total of 367 New Jersey financial advisors responded to the survey.