What Is The Minimum AUM Needed To Have Your Own RIA?

What is the minimum AUM needed to have your own RIA? Beware of anyone that gives you an immediate answer, with an immediate AUM figure to that question. There are often bias or ulterior motives behind such quick declarations. While the regulatory answer is $0 AUM needed to start an RIA, there are reasonable arguments to be made regarding at what AUM level it begins to make sense to do so. But even then, what makes sense for one advisor, might not make sense for another. On this episode of the Transition To RIA question & answer series I discuss the variables involved with what size your practice should be before considering starting your own RIA. I'm Brad Wales with Transition To RIA (TransitionToRIA.com). This is episode #143 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-is-t... 🔹 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 is the minimum AUM needed to have your own RIA? That is today's question on the Transition To RIA question & answer series. It is episode #143. Hi, I'm Brad Wales with 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 RIA model. Again, TransitionToRIA.com. Today's episode is something I get asked fairly frequently, both in direct conversations or if I'm perhaps being interviewed by an industry publication or I'm on a panel at a conference. Specifically, what is the minimum AUM needed, or the minimum size practice needed, to have your own RIA? That's what we're going to dive into here. And for those that have seen me or heard me answer that question, I often will rant about it as I'm a big believer that anyone that gives an immediate answer to that question, whoever that's being asked to, if they give an immediate answer with an immediate number, be very cautious. There's usually an agenda behind why they have answered so definitively one way or the other. As we go through today's episode, and I talk about all the variables involved, you'll understand why. As a starting point before I get to some of the variables involved, the very short answer is that there is no AUM minimum required to start an RIA. Now whether it's a good decision or not is something we'll get into, but from a regulatory perspective, and even nowadays from a logistical perspective, it is possible to start an RIA with zero assets under management. So just to give you the clear the deck regulatory answer, zero is technically the number of the hard minimum. And again, we'll get into factors that might not make sense for you to do that, but it is possible to do. And spoiler alert, I'm not going to give you a specific number as part of this because as you'll see, there's different variables that go into this that will impact advisors and teams in different ways. So there is no single number that applies to everyone. Hence, one of the reasons I say be careful of anyone that gives you that immediate answer. Again, there's usually some agenda behind that. What I want to give you though is some perspective of the considerations you'd want to put into this before making a decision on whether your practice is large enough to go down the path of your own RIA. And of course, that's a big part of what I help advisors and teams do is understand what does your practice look like now, understand what your vision is for it going forward, help you understand all these considerations that need to go into this and help you conclude whether having your own RIA makes the most sense and whether you have the size and scale where it makes sense. I’m happy to have that conversation with you as well. But as a primer to get things started, I'll give you some general takeaways. Con't..... View remainder of transcription here: https://TransitionToRIA.com/what-is-t... Disclaimer: https://transitiontoria.com/terms/