Episodes

A typical RIA “tech stack” is comprised of 3 core pieces of software: CRM Financial Planning Portfolio Management But what exactly does the generic sounding “portfolio management” tool do? Considering it is typically by far the most expensive piece of a tech stack, it’s important to understand the role it would play in your practice. In this episode (#136) of the Transition To RIA question and answer series I explain: What a portfolio management tool is. How these tools came to be. How ...

Choosing a custodian to hold your client assets is one of the most important decisions you’ll make when transitioning your practice to the RIA model. While it might at first seem as simple as picking from the “Big 3” (formerly “Big 4”) custodians, the reality is there are close to a dozen custodial providers to potentially choose from. Differentiators amongst them include: AUM minimums, pricing, approach to technology, value proposition, service offerings, etc. In the latest episode (#135) of...

In this episode (#134) of the Transition To RIA question & answer series we expand upon five critical ways advisors can make mistakes when transitioning their practices to the RIA model, and how to avoid them: Not thoroughly researching the RIA model to understand if it is a fit for your practice; Not thoroughly researching your options of how to transition into it; Misjudging your client loyalty; Not getting proper legal advice on how to navigate the departure from your current firm; Not f...

There is a well established process for how to breakaway from a wirehouse, to transition your practice to the RIA model. This process has been refined within the industry over many decades, and thousands of transitions. In this episode (#133) of the Transition To RIA question and answer series I outline the three main steps involved, and the variables within each step that are important to be aware of and consider Come take a listen! P.S. Prefer video? You can find this entire series in vide...

Attracting new clients is the lifeblood of any advisory firm. One of the advantages of transitioning your practice to the RIA model is the increased flexibility (as compared to most captive advisor models) in how you can brand and market your services. An example is the ability to establish paid referral relationships with, typically, centers of influence. These are referred to as solicitor agreements. But not all RIAs are created equal. In this episode (#132) of the Transition To RIA quest...

Being able to control your so-called “local expenses” as an RIA, or 1099 when joining an RIA, comes with additional responsibilities, but also significant benefits to match: Only pay for the resources you actually use. The ability to run as lean or extravagant of a practice as you wish. Determine the composition of your team. Benefit from controlling your local real estate footprint. On this episode of the Transition To RIA question and answer series I expand on these benefits, and others, ...

Should you consider joining a “roll-up” firm? But what exactly are they rolling up? All of your practice? Some of your practice? Do they take operational control of your practice? Is this a succession play? As I frequently lament about the term “hybrid” as well, the term “roll-up” is often used to describe different types of RIA firms, providing very different solutions for advisors. In this episode (#130) of the Transition To RIA question & answer series I explain several different ways ...

“You won’t be able to use Alts (alternative investments) if you transition to the RIA model.” “Ok, maybe that’s no longer the case….but you won’t have access to as many investment options as we have in the large broker/dealer world.” “Well….maybe that’s no longer true either, but our large scale gets us better availability/pricing than the RIA space.” “Damn it…..that’s no longer true either. You RIA folks now often have better options, pricing, etc. than we do!” This progression is how using...

A benefit of transitioning your practice to the RIA model is gaining access to a wider array of investment solutions, technology offerings, and service providers. But with some variables of your practice, you might desire to maintain a status quo. Advisors that currently outsource their asset management to 3rd party models or managers often prefer to maintain similar solutions upon transitioning. In this episode (#128) of the Transition To RIA question and answer series, I explain the variabl...

Participants in our industry often talk about moving to another broker/dealer. But when they say “broker/dealer” they are also often referring to an RIA. Or conversely, you’ll hear voices discussing joining or starting an RIA. Yet that too, could also potentially involve a broker/dealer as well. Confused yet? In this episode (#127) of the Transition To RIA question and answer series I explain the difference in these two structures and how the terminology is used properly. Come take a liste...

The RIA model typically provides far more flexibility with how you can charge your clients for your services. AUM, flat, subscription, hourly are some of the options. Even the most used “AUM fee” comes with additional flexibility. The frequency in which you charge the fee. What pricing tiers you use. Whether you charge in advance or arrears. Whether the fee is based on a single date in time (ex: quarter end), or an average of the period. The ability to pair an AUM with another fee type (e...

How difficult is a transition to the RIA model? It’s difficult enough that some advisors and teams can never bring themselves to cross the bridge. Whereas other advisors and teams learn how to navigate the process, and successfully do so. There are nonetheless still “difficult” parts to a transition: Overcoming the uncertainty of a model you’re not yet familiar with. (This is solved through education.) The workload involved with putting all the pieces into place, particularly down the stret...

You don’t have to be 100% fee-only to transition your practice to the RIA model. There are potential ways to “solve” for your remaining legacy commission assets. One potential way is to utilize an “RIA-Friendly Broker-Dealer.” But what exactly is an RIA-Friendly Broker-Dealer? How does it work? Is it available for you to use? How much does it cost? In this episode (#124) of the Transition To RIA question and answer series, I explain what an RIA-Friendly Broker-Dealer is and when you might...

So, you want to start an RIA? You want the better economics that come with it? The increased flexibility you’ll have with your practice? But are you aware of the additional responsibilities that come with it as well? As advantageous as the RIA model is, there is no free lunch. It’s important to understand what the additional responsibilities are, to determine if they are something you are able/willing to accommodate. And with your specific situation, whether the added benefits of the model...

Advocates of the RIA model will often passionately proclaim “THE PAYOUT IN THE RIA MODEL IS 100%!!!” With such generous economics, the RIA path must surely be best, right? For many advisors, it is the best path to take. But boastful headline numbers alone are not what determines that. For starters, it’s not a “payout” at all. As your own RIA, you’re simply receiving the fee revenue you generate from your clients for the value and services you provide for them. From that revenue, you must the...

You studied for months to take the Series 7. You anxiously sat through the multi-hour test. Perhaps with your livelihood on the line. You finished the test and nervously awaited the result. You passed! Years, if not decades have now since past. You’re considering transitioning your practice to the RIA model, but don’t want to “lose” the 7 you worked so hard for all those years ago. But do you have to? In this episode of the Transition To RIA question & answer series I explain if you must ...

“Platform fees” in our industry are the “resort fees” of the hotel industry. Just as a hotel room rate can be distorted by the addition of mandatory resort fees……payouts (particularly at independent broker/dealer models) are frequently distorted by additional platforms fees. The existence of a fee by itself is not necessarily a bad thing, provided the value and services received in return are commensurate. The first step in determining that is identifying when platform fees are present. Whil...

If you are an advisor at a firm that utilizes deferred compensation as part of the comp plan, ask yourself why your firm is doing that. If the value and resources they provide you are as superior as they claim to be, why would they need arbitrary barriers to keep you from leaving? Wouldn’t you simply want to stay? Regardless of the spin, deferred compensation is a retention tool to benefit the firm, not to benefit their advisors. So how best can you manage this reality if you are considering...

I am often asked, “How large a practice do I need, to have my own RIA?” Equally important is the other end of the spectrum as well, “Is my practice too large to potentially join an existing RIA?” There are three main pathways to transition your practice to the RIA model: Start your own RIA. Join an existing RIA. Utilize a solution that is essentially in the middle of these two. There are pros/cons to all three approaches. But is there a point where you might be too large for one of them? ...

A common misconception about the RIA model is that you must be 100% fee-only with your practice. While many RIAs are indeed 100% fee-only, and others aspire to eventually be, there is no requirement to do so. Many RIAs operate under a hybrid arrangement, allowing them to continue servicing legacy and/or new brokerage relationships. Other RIAs work to slowly transition their current fee/commission practice towards a fee-only structure. In this episode (#117) of the Transition To RIA question ...

You’ve spent months researching the RIA model. Months performing due diligence. Months planning for the actual transition. The day to transition arrives. You resign from your firm. You pick up the phone and call your first client to tell them about your new plans. But what do you say? How should you say it? What might your clients say? In this episode of the Transition To RIA question and answer series, I provide 9 tips on how to explain to clients your transition to the RIA model. Com...

What is the payout in the RIA model? Simple question, not so simple answer. To perform an accurate comparison, you must: Properly calculate your current payout. Understand how payouts are expressed in the RIA model (spoiler: there is far less uniformity in the RIA space.) Consider what value is provided to you for the payout, and what you’re responsible for sourcing yourself. Consider how the resulting payout figures compare across channels and offerings. In this episode of the Transition...

Transitioning your practice to the RIA model involves a lot of work, and at times, a fair amount of stress. But ask anyone that has made the transition, and they’ll tell you the destination is worth the journey. You should prepare yourself, though, for what the journey will entail. In this episode of the Transition To RIA question & answer series I explain what the most stressful parts of a transition are, and how to prepare for them. Come take a listen! P.S. Prefer video? You can find this...

If you start your own RIA, will you be able to participate in your custodian’s client referral program? First starters, do you know what these programs are? Or which custodians have them? Or who is eligible, and likely to be able to participate in them? In this episode of the Transition To RIA question & answer series I address these questions, and more! Come take a listen! P.S. Prefer video? You can find this entire series in video format on Youtube. Search for the TRANSITION TO RIA chann...