Deciding Whether to Build an RIA or Join One
Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.
In the movie series The Matrix, there’s a scene where characters have a vast selection of doors in a long white hallway. Entering a door allows them to jump to any other place within the Matrix, instantly.
As a financial advisor looking to jump to independence as an RIA, you have a set of doors before you as well. Your choices, however, aren’t found in an endless hallway with limitless possibilities. You have two doors that lead to independence.
Behind one of the doors, you can build a new RIA. Behind the other, you can join an existing one.
Which should you choose?
The path to becoming an RIA for breakaway advisors
Building an RIA or joining one is a huge career decision, and it’s not one that any advisor should approach without due diligence and taking a variety of viewpoints under consideration.
You can go to an institutional custodial platform as a breakaway advisor to get support toward building your own firm so you can own and control everything you do, plus create enterprise value.
However, there’s a second path – one that’s perfect for advisors who want to pursue the RIA path and enjoy more freedom with clients, but without the burden of owning everything that comes with a business.
Whichever way you go, breaking away untaps much more significant value in your client relationships than staying in a captive environment.
With that said, I’ll lay out the full pros and cons for building or joining to help you think about which decision is right for you.