Join an Independent Registered Investment Advisor (RIA)
Joining an existing independent registered investment advisory (RIA) firm allows you to serve clients on an asset management fee basis with limited risk and without the burden of managing the operational and growth challenges that come with running your own business. This option allows you to deliver advisory services and participate in the organization's growth, while the firm's management takes primary responsibility for day-to-day business matters, including business financing and growth, business development and marketing, staffing, technology, legal, and compliance issues.
Opportunities to join an existing RIA are plentiful, and the competition for your services is fierce. In 2007 alone, the investment industry sought to recruit 10,000 to 25,000 professionals–far outpacing the supply of available talent.1 Independent RIAs attract some of the best advisors in the business, thanks to a five-year track record of 18.7% growth in assets under management (AUM) and high equity valuations. The Securities and Exchange Commission (SEC)–which regulates this part of the industry–lists approximately 11,000 RIAs, ranging from large, well-established firms to small, intimate practices. In total, independent RIAs manage over $2 trillion in assets, with an average of $250 million per advisor, making this a highly attractive business model.
Hybrid Advisor Within a Registered Investment Advisor
Over 25% of all RIAs in the country include some advisors registered as representatives of a broker-dealer. A broker-dealer affiliation allows these advisors to offer commission-based services to clients and to collect trail commissions (mostly 12b-1 fees). This arrangement requires the approval of the broker-dealer and not all broker-dealers agree to it as they have some supervisory responsibility and risk with respect to the RIA activities.
1 The Race for Top Talent, Moss Adams, LLP, 2007.
