What Are The Pros And Cons Of The RIA Model?

There is no golden goose when it comes to affiliation models in the wealth management industry. Wirehouses, independent broker-dealers, RIAs all have pros and cons. Anyone who suggests otherwise is either ill-informed or being disingenuous. So when considering pathways for your advisory practice, it's important to understand how those pros and cons compare. In this episode of the Transition To RIA question & answer series, I explain the pros and cons of the RIA model. I'm Brad Wales with Transition To RIA (TransitionToRIA.com). This is episode #150 of my question and answer series where I answer RIA related questions I get from advisors just like you. What I do: At Transition To RIA I help financial advisors and teams between $50M and $1B understand everything there is to know about WHY and HOW to transition their practice to the Registered Investment Advisor (RIA) model. RESOURCES & LINKS ___________________________________________ 🔹 Website: https://TransitionToRIA.com/ 🔹 Show notes: https://TransitionToRIA.com/what-are-... 🔹 Contact me: https://transitiontoria.com/contact/ 🔹 List of all questions I've answered: https://transitiontoria.com/videos/ 🔹 Podcast: https://transitiontoria.com/podcast/ 🔹 Whitepaper ("11 Ways The Economics Of The RIA Model Are Superior To Other Advisor Affiliation Options"): https://transitiontoria.com/whitepapers/ 🔹 Transcription of video: What are the pros and cons of the RIA model? That is today's question on the Transition To RIA question and answer series. It is episode #150. Hi, I'm Brad Wales from Transition To RIA where we help you understand everything there is to know about why and how to transition your practice to the RIA model. If you're not already there, head to TransitionToRIA.com where you’ll find this entire series in video format, podcast format. There are articles, there are whitepapers. There's a Vendor Profile Series. All kinds of things to help you better understand the model. Again, TransitionToRIA.com. Today's episode is a pretty meaty topic… what are the pros and cons of transitioning your practice into the RIA model? This is episode #150, so I figured for a nice round milestone episode, it deserved a good meaty-sized topic. But as a result, there's a lot to cover here, and so I'm only going to go into some of these topics at a high level. But it is to give you at least an initial understanding of what the pros and cons are of a potential transition of your practice to the model. And the reason I'm pointing out the pros and cons is I am a big believer that you need to understand both sides of the coin. Every model in the industry has pros and cons. There are pros and cons to wherever you are now. There are pros and cons to staying wherever you are now. There are pros and cons to the wirehouse model. There are pros and cons to the independent broker-dealer model. There are pros and cons to the RIA model. There is no golden goose. Anyone that ever gives you the impression about whatever model you're in, including your current firm, gives you the impression that that is the best solution in every way possible, and there are no cons to weigh those pros against, is either ill-informed or is being disingenuous. Again, there's no golden goose. What you want to do is make sure you understand what these pros and cons are, compare them to the pros and cons of what you have now, and ultimately say… would making some sort of change put me in a better place? So with that, I want to give you some high-level pros and cons of the RIA model. This is not an exhaustive list, but it will give you plenty of things to be thinking about. On the pro side, generally speaking, and I'm going to give you several examples here, but generally speaking, all the different pros that we could talk about fall into one of two buckets. And those buckets are either a desire for better economics that you're hoping to achieve by going to the RIA model, or better flexibility with your practice. I'll give you examples of both of those. Higher Income On the better economics standpoint, and these are not necessarily in any particular order, the first one is higher income. Generally speaking, for reasons you'll see as we keep working through this list, the income you can derive as a financial advisor, in most all scenarios, is going to be higher in the RIA model. Now, that comes with responsibilities which we'll get to, but the income generally is higher particularly if you are currently at a wirehouse firm, where you are giving the lion's share of your revenue to your firm. Now your firm is providing you some value for that, but we could look at the economics and say… are you getting your money's worth for that? Con't.... View remainder of transcription here: https://TransitionToRIA.com/what-are-... Disclaimer: https://transitiontoria.com/terms/