A new opportunity for gaining control and better serving clients.
What the RIA Model Is and How It Can Benefit You
An independent registered investment advisor (RIA) is a professional advisory firm that offers advice about securities, often for a fee.
RIAs are registered with the Securities and Exchange Commission or their state securities regulator and are subject to the Investment Advisers Act of 1940.
Benefits Advisors today have more possibilities and flexibility than ever in how they manage their practice and serve clients. Being independent as an RIA provides the open architecture many advisors are looking for to brand and differentiate themselves. The appeal of becoming an RIA can be summed up in one word: control. Whether they start their own RIA firms or join established ones as co-owners or principals, advisors who make the transition to independence often experience greater control of their business and compensation. They offer clients a unique experience that can rival that of other industry leaders.
Key concepts behind the RIA Model:
The term “payout” goes away, because the RIA model is not a production culture
The RIA firm decides which products and solutions the advisor can offer
The RIA firm drives business decisions, such as marketing and compliance policies and procedures, as well revenue and expense management
What independence means:
This white paper ( 842K PDF) explains the case for starting or joining a RIA firm
What an RIA Custodian Is
Custodians such as Schwab offer platforms for holding client assets and providing investment products, practice management solutions, back-office technology and service support. However, custodians do not share in the economics of an RIA firm. The custodian is compensated through brokerage commissions, or asset-based fees in lieu of commissions, as well as other fees.
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“Since we’ve gone independent, we’re getting involved with our clients like never before. We now have the ability to spend more time and energy with them.”
842K PDF) explains the case for starting or joining a RIA firm