Six Platform Issues for Brokers Moving to an RIA

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A financial advisor transitioning from a large brokerage platform to an RIA setting has a lot to do and even more to keep in mind. This is true whether the advisor is joining an existing RIA or establishing a new one. Understanding the difference between investing through an RIA and a broker-dealer hinges on an appreciation of what advisors can expect when transitioning to an independent investing environment that features more choice and less active vetting than they may be used to. To help solve this problem, here are the six key investment-platform considerations for brokers moving to an RIA:

  1. The investing landscape differs for an advisor who has made the transition from a “captive” brokerage to an independent RIA. It’s like going from a supermarket to a warehouse. In the brokerage supermarket, you have a wide variety of, let’s say, potato chips – all the varieties you need, with different flavors, packaging and pricing. They are displayed and arranged side-by-side under bright lights for easy access and comparison. But in the RIA/warehouse, you’ve got more of everything – more chips, more types of chips and more pricing permutations.