RIA Independence

Why do we still refer to so many firms in the advisory profession as broker/dealers?

As a financial advisor looking to jump to independence as an RIA, you have two doors from which to choose.

On March 1, two unrelated Securities & Exchange Commission actions set out the state of its thinking on enforcing the “best interest” and “fiduciary” standards.

I am interested in any guidelines on paying and compensating my assistants.

New data on consumer preferences and behaviors during COVID shows that the advisory firms face daunting challenges with respect to staffing, differentiation and – if they are private-equity backed – financing and maintaining profitability.

Here are five ways the right partner can help you become more efficient in independence.

Here’s rough justice: FINRA’s February 9 disgraceful report on broker-dealer breaches of Reg BI came out just as the Winter Olympics was tarnished by the politics of the IOC.

Advisors who reject bucketing strategies because they won’t invest as many as five years of assets in low-yielding securities are exposing clients to risks that threaten their standard of living in retirement.

Some observers assume I tell everyone that they should go down the RIA path. That is not the case.

If you transition your practice to the RIA model, it is not a matter of whether you will outsource, but how much.

Imagine if universities started crafting their coach’s compensation plans the way broker/dealers draft plans for their advisors.

I predicted that 2021 would be a transitional year for managing an advisory business, and I expect this transition to accelerate and become fully formed in 2022. These are the changes that I envision for the coming year and beyond.

Last week’s off-year elections in Virginia, New Jersey, Buffalo and Minneapolis bodes big trouble for the Biden administration. But overlooked was a report from state securities administrators stating, frankly, the opposite. The “states” supported administration efforts to strengthen the regulation of broker-dealers.

The SEC has totally abandoned its consumer protection mission, which is clearly spelled out in the law, and has been for at least the past 81 years.

There’s a fallacy among advisors that selecting a platform partner is an either/or proposition: a TAMP or an open-architecture solution. There is a middle ground. Some describe it as a “full-service portfolio management platform.” The team at SEI calls it a Techstodian^SM.

The SEC has launched a monumental rule-making effort to enact mandatory climate-risk disclosure; the goal is “consistency, comparability and reliability,” according to Chairman Gary Gensler. Let’s hope it succeeds and the same principles are applied to disclosing the roles and purposes of broker-dealers and investment advisors.

Ask 10 people in the advisory profession what a “hybrid” is and you will get 10 different answers.

For almost three decades the acronym TAMP, for turnkey asset management program, has stuck. It’s time to kill it.

Rick Bookstaber warns that investors face the risk of a “leverage liquidity cascade,” where margin calls would trigger forced selling across asset classes.

A common question I am asked by advisors who want to learn more about the RIA model is how do the payouts work? Is it really 100%?

Form CRS is under greater SEC scrutiny by the Biden administration. How advisors and broker-dealer representatives are compared matters. A review of a few major firms’ CRS is illustrative.

The financial stress from starting a new advisory firm is no joke, and it sets up outcomes that are potentially disastrous for everyone involved. Here are six ideas for how to start an RIA firm today without living in poverty and having to eat cat food.

Here are several ways you can make yourself a household name in your area, and they don’t involve throwing thousands of dollars at an advertising budget.

The SEC has a unique opportunity to redo form CRS to help investors and investment professionals better understand how broker-dealers and investment advisers differ.

Keeping that broker-dealer license comes with costs, both financial and emotional, in the form of two sets of compliance obligations.

Here are 10 questions to ask yourself as you assess the CRMs available in the Golden Age of FinTech.

Should investors know that brokers are not advisors to customers?

The advisory profession is set up to encourage selfishness and greed. For that to change, compensation must change. These thoughts are radical, so take a seat before you read.

Ask someone a question in which the respondent has a vested interest in how it is answered, and you know what the answer is before asking it. I see this when I am talking to advisors about the RIA model.

Joel Bruckenstein of T3 and I just released the 2021 T3/Inside Information Advisor Software Survey, which includes user ratings and market share statistics (and year-on-year changes to both) for more than 400 different software products and services in 32 different categories.

I want to share a math formula I often discuss with advisors. This is for anyone considering transitioning their practice to the RIA model or is already working through those steps but is struggling to reach the finish line.

A solution for the challenge of moving wirehouse clients with active securities-based loans.

There are times when you are called to advocacy. As a profession, this is one of them. Advisors are the stewards, the informed, the protectors, and if there is a force that stands between the next generation of investors and financial devastation, it is you.

Let’s look at the correlation between size of independent advisory firms and the average wealth of the clients they serve.

A year-end SEC order and statement by its staff on Reg BI exams are a positive signal for investors in need of fiduciary protection.

This mass exodus of breakaway brokers hasn’t happened, much to the chagrin of us prognosticators, and I know why.

When we explore the specifics of an advisor’s business, there are commonly asked questions around the nuances between the SEC and FINRA.

For the second consecutive year, Advisor Perspectives has been ranked as the electronic newsletter that is most-read by financial advisors.

As financial firms rely more on online and out-of-office platforms and services, especially during the COVID-19 pandemic, the likelihood increases that proprietary and confidential, nonpublic customer information is stolen, deleted or ransomed.

If beating the market was as easy as becoming a top tennis player, there would be a lot more Serena Williams and Roger Federers. The lessons of acquiring skill in tennis are crucial for investors to heed.

I have much to say about referrals. For this article, let’s focus in on three of the biggest mistakes I have seen advisors make with referrals.

An historic realignment of fiduciary advice has snuffed out 40 Act principles. The SEC, the coming DOL Rule, and CFP Board standards have rejected them. The realignment reveals a path of destruction – to the law, language and logic.

The following remarks were delivered by Ron Rhoades upon receiving the Frankel Fiduciary Prize from the Institute for the Fiduciary Standard on September 29, 2020.