RIA Independence

I proclaim the pending demise of the independent broker-dealer model.

Less than a month after I recommended that an organization – specifically NAPFA – set new membership standards regarding an RIA firm’s revenue model, one has risen to take up the challenge.

The Harvard Business School’s Michael Porter is the leading authority on industry structure and competitiveness. His framework shows how RIAs should think strategically about the current state and future evolution of their industry.

This is Advisor Perspectives' fourth consecutive year of ranking ahead of The Wall Street Journal and Bloomberg among the e-newsletters listed, with 14% more readership across the 1,120 financial advisors surveyed. Advisor Perspectives also claimed the number one spot for e-newsletters among the independent registered investment advisor (RIA) segment.

I’ll be the first to say that the RIA model is not for everyone.

Reg BI is the most divisive issue in the fiduciary discussion and was a focus of the discussion during September’s event.

What will happen to the clients of advisors who don’t have a formal succession plan in place?

As more advisors break away from broker-dealers and drop their series 6 or 7 registrations, the annuity industry has evolved to support and compensate them through RIA-friendly solutions.

Instead of focusing on the advantages fiduciary standards would provide to the profession, lobbyists who represent advisors should point to the catastrophic failures of the perverse incentives embedded in the brokerage business model.

I will provide several examples of how to reduce your real estate expenses, thus increasing your practice's profitability.

Before you evaluate your next fintech purchase, here’s what advisors need to know.

“Price matters again in investing,” according to Bob Wyckoff a managing director of Tweedy, Browne. “That serves the interests of value investors.”

US trading titans and brokerage firms are building a crypto exchange that brings investing in digital assets further into the domain of traditional finance, by mimicking the structure of how other asset classes trade.

Advisors won the last war – true professionals achieved victory by adopting fiduciary principles and providing comprehensive planning. But a new battlefront has emerged – what I call the “next argument” – and achieving victory will slow and painful.

One of the common questions I get is how to convert a friend or acquaintance to a business prospect. Use this five-step process.

The classical notion of 1940 investment advice has been hijacked and replaced by the SEC with a weak, distant cousin.

I explain how attempts to view advisor compensation through a moral lens instead of an economics lens lead to false conclusions about the relative merits of each pricing model and hence to misguided predictions for the future of planner compensation.

The views you often read on advisor compensation models and their future are misguided.

Looking for greener pastures, advisors are weighing their options.

A few days ago, Coinbase Global Inc.’s top lawyer issued an unequivocal rejection of the US Securities and Exchange Commission’s allegations that digital tokens it offers its customers were, in fact, unregistered securities. “Coinbase does not list securities,” Paul Grewal wrote in a blog post. “End of story.”

I am not a practice management guru, but the value proposition I provide parallels the value being provided by advisors. Many don’t give themselves credit for the value they’re providing.

FINRA interprets “financial advisor” as being usable (on business cards and elsewhere) by any financial professional who holds an RIA affiliation, whether or not the relationship with the client is in fact an advisory one.

Reg BI turns two on June 30th. It was supposed to help investors better understand how advisors and brokers differ and have BDs meet a “best interest” standard based on fiduciary principles. It turns out that Reg BI is doing the opposite.

I am not implying that brokerage firms that pay their advisors via a “payout” are lying, but there is no shortage of misleading when it comes to payouts.

Mistakes are easy to make but are easier to avoid if you know what a “bad” succession plan looks like.

The advisors who figure out how to work with Generation Z will take your wealthy Baby Boomer clients away. Stop rolling your eyes and listen to why.

Meet a woman driven to change investment regulation and understand why it’s important that she succeeds.

RIAs can be paid to service trails-paying annuities without a broker-dealer.

Here is the just released our 2022 T3/Inside Information Software Survey. It ranks, by market share, the leading software solutions in advisory-firm tech stacks in 35 different categories.

The SEC staff has issued a statement saying to investment advisers that their fiduciary status is “extraneous.”

Consider the upfront bonus checks often paid to advisors leaving one broker/dealer to join another. That “bonus” is not a bonus at all.

I’ll take an order of flat fees (otherwise known as retainers) with a side of financial planning. Customers are lining up out the door for this.

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.