Episodes

Determining whether to transition your practice to the RIA model does not have to be intimidating. The entire process can be simplified down to three key decisions, sequentially addressed in order: Is the RIA model a fit for my practice? What are the available pathways into the model? Who are the solution providers that support my chosen pathway? In this episode of the Transition To RIA question & answer series I explain how these three decisions guide you through the process. Come take a ...

If you transition your practice to the RIA model there are a LOT of variables to consider, and decisions to be made. What technology to use is one of the most important of them. Within the technology "stack," your Customer Relationship Management ("CRM") tool is arguably the most important component. In this episode of the Transition To RIA question & answer series I explain why the CRM is so important, and how you should consider implementing it with your practice. Come take a listen! P.S....

There are multiple tasks involved with running an RIA practice. Advisors tend to be passionate about the client facing tasks, and less so the behind-the-scenes administrative and operational parts. What if you designed an RIA where you outsourced most (all?) of the non-client facing tasks? What if you could spend nearly all your time on just the parts of the business you really enjoy? In this episode I explore how far you can potentially take outsourcing within an RIA. Come take a listen! ...

You've done your homework to learn how the RIA model works. You've considered the different pathways into the model. You've performed due diligence on the needed solution providers. It all makes sense. It's a fit for your practice. You're ready to get started! But, is there anything that could prevent you from doing so? Yes, there are hurdles that, depending on your circumstances, could be insurmountable. In this episode of the Transition To RIA question & answer series I explain what those...

How much does it cost to start a Registered Investment Advisor ("RIA") practice? As often occurs with the advice that financial advisors give their own clients, the answer is "it depends." For new advisors first entering the industry who plan to run a virtual practice, the cost might be as little as a few thousand dollars. For a large team catering to HNW clients, who plan to transition their practice from an existing broker/dealer firm, the cost could potentially be $100,000+. There are seve...

Obtaining Errors & Omissions ("E&O") insurance for your Registered Investment Advisor ("RIA") is not only a best practice, it is usually now a requirement for most RIAs. E&O is professional liability insurance that protects your RIA from risks ranging from the proverbial "fat-fingered" trade entry error, to defending yourself against meritless lawsuits. Most custodians now require RIAs using their clearing services to maintain a minimum level of E&O coverage. In this episode I explain what th...

A common frustration by financial advisors in the broker/dealer model is a burdensome compliance department. This is often the result of the firm managing compliance to the lowest common denominator amongst thousands of advisors at the firm. An inaccurate assumption about the RIA model is that joining an RIA with similar growth aspirations will lead to a compliance burden no better than what the advisor is trying to get away from at their broker/dealer. In this episode, I explain why this is ...

A tale often told by broker/dealer management is that B/D technology is superior to the technology available in the Registered Investment Advisor ("RIA") model. A few decades ago, they were right! There was a time that broker/dealers had better economies of scale with technology investments as they had more advisors (users) to spread the investment cost across, versus what any one tech provider in the then RIA space could achieve. That investment advantage, led to better technology. That par...

It is common for advisors transitioning their practice to the RIA model to want to bring their existing support team members with them. Those team members are often not only critical to the advisor's practice in general, but will likely play a key role in the transition process itself. In this episode of the Transition To RIA question & answer series, I am joined by attorney Rich Chen to discuss what options you have for bringing team members with you, and how to navigate the process safely. ...

There are many advantages for why financial advisors transition their practices to the Registered Investment Advisor ("RIA") model. Equally compelling are the advantages for their clients. It is important to be able to articulate to your clients what the RIA model is, why you are transitioning your practice to it, and how it benefits them. I frequently ask advisors that have already made the transition, how they explained it. In this episode I provide several talking points to consider, and I...

"Can I manage client assets myself as an RIA?" This is a simple question, with a simple answer. “Yes” More telling is why advisors are asking it in the first place. It is often due to concern that their ability to manage assets under their current affiliation model could become constrained, or even taken away from them at some point in the future. (Of no fault of their own, but due to firm wide policy changes.) Thus, they're wanting to confirm this possibility would be eliminated if they tra...

Episode notes: The Registered Investment Advisor ("RIA") model remains the fastest growing channel in the industry, with no indication the trend will slow anytime soon. Year after year, financial advisors seek out the better economics, flexibility, and higher enterprise valuations afforded by the model. With such advantages, why don’t even more advisors (than already are) make the transition with their practices? In this episode of the Transition To RIA question & answer series, I address th...

There are many misconceptions about the RIA model. You can’t take your legacy commission business with you…..false. You’ll spend all your time on compliance…..false. You can’t use alternative investments…..false. The technology is inferior…..false. I could go on and on. In this episode of the Transition To RIA question & answer series, I address another falsehood: You can’t accommodate clients who have concentrated stock positions. You can indeed. Come take a listen! Show notes: https:/...

Imagine I challenged you to a one-on-one game of basketball. We each use the same equipment. The rules of basketball apply to both of us. One caveat: You must play with one arm tied behind your back. Sound fair? Or an unfair advantage? If such a scenario seems preposterous, consider if you’re currently a one-armed player as an advisor. The Registered Investment Advisor ("RIA") model provides financial advisors an advantage over advisors not in the model. In this episode I explain 13 of tho...

Want to know the dirty little secret of real estate expense for advisory practices? You need to pay for the expense of your office as a fixed cost, not a variable cost via your payout. The difference in approaches, particularly if you own your office building, could potentially result in millions of additional dollars to your net worth by the time you retire. In this episode I discuss why and how to pay for office expense as a fixed cost, as well as additional ways you can decrease the expens...

What is a corporate RIA? You're possibly already affiliated with one and don't realize it. Worse, you could be affiliated, and don't realize if it's even competitive or not. As the trend to fee-based advisory relationships continues, the concept of a "corporate RIA" will become increasingly prevalent. In this episode of the Transition To RIA question and answer series, I explain how corporate RIAs came to be, what sort of offerings currently exist, and what they'll need to do to be competiti...

I am frequently asked how the economics of the Registered Investment Advisor ("RIA") model compare to the broker/dealer model. The first step in a comparison is to calculate your existing broker/dealer payout. However, you can't simply refer to a payout grid table, and conclude that is your payout. There is a reason advisor compensation plans generally run 20+ pages! What eventually flows to your pocket, is often far different from what the grid table would indicate. In this episode of the T...

Ever been told you shouldn't go the RIA route because you won't get any support? You'll be on your own? You'll be so busy doing administrative tasks you won't have time to be an advisor? Often, the people making such declarations have ulterior motives. Perhaps it's a branch manager, or home office executive that doesn't want to lose you from their firm. There is an entire ecosystem supporting the RIA model that makes such statements irrelevant. There are now even fully "SUPPORTED INDEPENDENCE"...

It doesn’t happen often, but I do get asked……can I have foreign clients as an RIA? This is relevant if you have such clients in your current affiliation model, or you aspire to add them to your clientele upon transitioning to the RIA model. Similar to if you’re at a broker/dealer now, the answer is generally….it depends. In this episode of the Transition To RIA question and answer series, I explain when it is possible to do, as well as discuss the solution providers you’ll need to lean on to ...

It doesn’t happen often, but I do get asked……can I have foreign clients as an RIA? This is relevant if you have such clients in your current affiliation model, or you aspire to add them to your clientele upon transitioning to the RIA model. Similar to if you’re at a broker/dealer now, the answer is generally….it depends. In this episode of the Transition To RIA question and answer series, I explain when it is possible to do, as well as discuss the solution providers you’ll need to lean on to ...

It doesn’t happen often, but I do get asked……can I have foreign clients as an RIA? This is relevant if you have such clients in your current affiliation model, or you aspire to add them to your clientele upon transitioning to the RIA model. Similar to if you’re at a broker/dealer now, the answer is generally….it depends. In this episode of the Transition To RIA question and answer series, I explain when it is possible to do, as well as discuss the solution providers you’ll need to lean on to ...

There are two ways to improve the profitability of a business. Increase revenues or decrease expenses. Preferably, you do both. The RIA model provides far greater flexibility than any other advisor model with your ability to impact each. How you manage that flexibility is what determines your bottom line. In this episode of the Transition To RIA question & answer series I discuss how to maximize the profitability of an RIA. Come take a listen! Show notes: https://TransitionToRIA.com/how-t...

There are two ways to improve the profitability of a business. Increase revenues or decrease expenses. Preferably, you do both. The RIA model provides far greater flexibility than any other advisor model with your ability to impact each. How you manage that flexibility is what determines your bottom line. In this episode of the Transition To RIA question & answer series I discuss how to maximize the profitability of an RIA. Come take a listen! Show notes: https://TransitionToRIA.com/how-t...

There are two ways to improve the profitability of a business. Increase revenues or decrease expenses. Preferably, you do both. The RIA model provides far greater flexibility than any other advisor model with your ability to impact each. How you manage that flexibility is what determines your bottom line. In this episode of the Transition To RIA question & answer series I discuss how to maximize the profitability of an RIA. Come take a listen! Show notes: https://TransitionToRIA.com/how-t...