Advisors seeking to leave their wirehouse positions and pursue an independent path as an RIA or independent broker-dealer often find themselves facing an intimidating gauntlet of compliance, communication, marketing, management, and transition options, each with its own set of costs, advantages, and pitfalls. Building any business from the ground up is a complex process, building a compliant, successful RIA even more so.
But these complexities should not discourage advisors from pursuing an independent path. Just as there’s no one-size-fits-all model for wealth management and financial planning, there are a number of options available to advisors who aren’t interested in building a brand new business from scratch. Of these, the turn-key RIA offers the most support for newly independent advisors. We’ll discuss why advisors should consider a turn-key model, as well as how to find the right turn-key model for your breakaway RIA.
What is a Turn-Key RIA?
In a turn-key RIA, an advisor outsources compliance, administrative, technology, and even marketing functions to a third party, leaving the advisor free to focus on the RIA’s core business. Terrana Group works with several turn-key RIA firms which provide back-office support, wealth management platforms which allow for a seamless practice transition, boots-on-the-ground transition help with paperwork and technology systems, and even marketing and financing options. A turn-key RIA model can also allow an advisor to be a bolt-on W-2 employee of an existing RIA firm, allowing the advisor to keep the benefits of being an employee while maintaining total independence over their client base. And when it comes time to sell your RIA, Terrana Group will stand ready to support you in that process as well.
As an example, LPL Financial’s options for RIAs include acting as a custodian for client funds, a comprehensive technological platform for managing client investments, and the ability to integrate third-party technological tools. LPL also offers compliance and risk management solutions under its Corporate RIA and provides mergers and acquisitions support for the sale or merger of RIAs.
Similarly, Kestra Financial’s Private Wealth Services turn-key offering includes office and administrative support, consulting, technology, and transition services that ensure new RIAs can focus on serving client needs.
What Are The Drawbacks Of A Turn-Key RIA?
Turn-key models, then, can be attractive, particularly for advisors just leaving the wirehouse. But they are not without potential disadvantages. First, the one-size-fits-most model can have some of the same downsides as a wirehouse, particularly if the administrative and technological wealth management options offered don’t suit the advisor’s needs. An advisor might spend time learning new software, only to realize that the software is incompatible with the advisor’s workflows or preferences. And while most turn-key providers allow advisors to customize their offerings, time spent learning and evaluating customization options is time not spent marketing, meeting with prospective clients, or working with existing clients.
For more entrepreneurial, technologically savvy advisors, picking and choosing from independent providers to create customized solutions, a turn-key model can be limiting, requiring an advisor to learn new tech platforms and other front- and back-office solutions that may not suit the advisor’s practice.
What’s more, turn-key solutions are not without cost. A cost-conscious advisor may be able to mix-and-match lower cost options that are a better fit for the advisor’s practice. For example, an advisor whose client base consists of a few high-wealth clients may not need a full CRM system to manage client contact.
How Do I Know What RIA Option Is Best For Me?
Even understanding the options available to advisors leaving the wirehouse can feel overwhelming. Working with a recruiter or consulting firm is the best way to ensure that you find the right firm to custody client funds, and the right level of support for your business.
For over three decades, we at Terrana Group have been involved in over 2200 professional placements for Financial Advisors, with client assets transferring to the hiring firm exceeding $67 billion dollars. We serve a diverse client base of broker dealers, custodians, RIAs, and other advisors throughout the financial services industry. We’re ready to listen to your needs and recommend scalable, long-term solutions that fit your needs as you transition in your career to an independent path.
Want to Keep the Conversation Going?
Thinking about making the leap to independence, but not sure what comes next? All of us at Terrana Group welcome the opportunity to consult with you to determine the right platform for you going forward — one that satisfies your long term objectives and is also best for your clients!
Over the course of nearly 30 years, we have consulted on and closed thousands of professional placements for Advisors, nationwide, in most every major city throughout the United States, with client assets transferring exceeding $67 billion dollars. We have built deep relationships with the advisory world’s most sophisticated and notable firms — including Wall Street Brokerages, Regionals, Boutiques, Banks, Independent Broker Dealers, RIAs and Custodians. Our broad knowledge of those firms and the deals that are currently being offered will ensure that you are being presented with the right firm choice, platform, and the offer which is best for you.
Confidentiality, professionalism, and respect are protocol to our practices and beliefs; we handle each and every step of the placement process with complete communication, keeping you informed while making the process smoother from beginning to end.
We are proud to always be considered as a great asset by our clients because of our proven expertise, many years of knowledge, and acute attention to detail. Financial Advisor Recruiting Services are not all created equal; we guarantee that the TG experience for clients and candidates is always world class.
We are based in Chicago, with a nationwide reach. Let us know you are interested by contacting us today. To get the conversation started, email info@terranagroup.com or give us a call at 312.655.8380 today.
