Ask Brad: What is a “Hybrid” RIA?
This is the latest installment of a regular column to answer questions from advisors who are considering transitioning to an RIA model. To see Brad’s previous articles, click here. To submit your question, please email Brad here.
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Ask 10 people in the advisory profession what a “hybrid” is and you will get 10 different answers.
What exactly then is a “hybrid,” not to mention a “hybrid RIA”?
There is consensus that to be hybrid means to be operating under both a broker/dealer as well as an RIA.
That is where the harmony ends.
After all, if that is the definition, isn’t almost every “advisor” already under a hybrid structure?
Wirehouse advisors are generally registered representatives of their firm’s broker/dealer, while also being investment advisor representatives (IARs) of the firm’s accompanying “corporate” RIA.
It is no different with independent broker/dealer advisors. I’ve even seen some such firms tout a “hybrid” model, which in effect did not differ from their traditional indie-BD affiliation model, albeit with an altered payout structure. This magically transforming it into a “hybrid” solution, at least in self-declared name.