The Case for Joining an RIA Part 4

The Case for Joining an RIA Part 4


By: Abby Salameh, Chief Marketing Officer and Charlie Latimer, Director of National Recruiting
Published November 9, 2016

Just because we are financial professionals does not mean we need to burden ourselves by doing our own tax returns. We gladly outsource our tax returns to accountants, and it’s the best $500 ever spent. Let’s apply the same logic to our businesses. Does your ego really command you to micromanage every aspect of your daily operations? What if you could get 99% of everything you wanted but with much more time at your disposal and peace of mind? What if you could continue to receive all the core services you need but could outsource some of the extra items so you don’t have to worry about them? Items like compliance, risk management, superior customer service, advocacy for the independent model? A hybrid RIA offers you this opportunity. In the final installment of our four-part series (see parts one, two and three) on factors to consider when weighing the case for joining an RIA, we unpack the service and support you can expect to receive from this independent partnership. It really is like the icing on a cake.

PART 4: Icing on the Cake

Value-Added Services

One of the reasons you would join an RIA is to take advantage of the group’s buying power and leverage. RIAs that are built to serve advisors have to differentiate themselves by constantly bringing new resources and services to the table at no cost, or at least a substantially lower cost. They use their buying power to negotiate lower rates with vendors and service providers, which should benefit you and not them. If they are building a spread for themselves as a middleman or toll collector, then they may not be a true partner. Ask them how they make money and request all of their sources of revenue. Transparency is key.

Personalized Service and Support

When you meet the management and staff working at the RIA, ask yourself a few simple questions: Do you like them? Do you like what they are telling you and the energy they project? These are the folks you are going to be calling on at least every week, if not every day. Avoid firms with an “elitist” or arrogant presence. Arrogance is nothing more than cover for insecurity. What does their “service delivery chain” look like? That is, how are service teams structured at the custodial level supporting the RIA? How does the RIA intervene when something goes wrong when your client’s service experience hangs in the balance? This is a value add that the RIA needs to articulate. They need to demonstrate that they will escalate issues on your behalf and partner with you in finding a resolution. Bad service in the eyes of your client is always your fault, no matter where the breakdown occurs!

Advocacy and Community

How does the firm you’re considering support your interests? Are they leveraging their power to negotiate with custodians for your ultimate benefit? Do they have regular conferences and provide a pipeline of regular meaningful content like webcasts and study groups that actually help you? Do they provide their advisors with a true sense of community? Is there camaraderie across their advisor base? Talk to a few advisors to find out such subtleties.

Culture of Success

It seems rather obvious, but success attracts success. If you are looking to join an RIA, you want to understand that the firm is attracting successful advisors like yourself – advisors who evaluated the landscape and made a decision to work with that particular RIA. Are they attracting $1 million producers or $100 thousand producers? You want to understand what the pond looks like.

In closing on our four part blog series, we want to reiterate that in these times of dramatic change in the landscape of the financial advisory business, it is just as important to chose the right business part as it is to chose the right clients that will comprise of your business. We believe that joining a large RIA provides you with the scale, the community, the risk management and the solutions to help you manage your business now and for the future to come.