Series 65- What Are the Ongoing Expenses for an IAR ?

CALTCAgent

Guru
1000 Post Club
2,584
Hello,

I have talked to a few RIA's and am trying to find out what the ongoing expenses and breakdown of those should be ?

One RIA told me E & 0 can be obtained from NAPA for around $73 a month for an IAR/RIA.

There is also the state registration fees. Not sure what these are approximately.

One RIA told me that about $250 a month covers their "services".

Which are:

* Holistic financial planning process
* Support from an experienced financial planning team
* Back office operational support
* Compliance oversight
* Access to several 3rd party money managers
* Marketing support

I think one RIA said a person can be a "solicitor" only with them. The ongoing cost would only be state registration fees. Of course this was more limited role. Basically it sounded like a referring over people arrangement.

Thanks!
 
Annual state registration & renewal fees... will vary according to your state.

State Investment Adviser Registration Information - NASAA

Remember that RIA is a firm, and an IAR is the representative for that firm. So, in California, if you were to open your own RIA firm, then it would be $125 per year for the firm, and $25 for each IAR for that firm.


Every RIA firm will have varied support services and require various expenses of their IARs. Just keep comparing until you find the arrangement you like the best.
 
After E&O, RIA tech fees, misc RIA fees, & state fees; you will be anywhere from $2k - $10k depending on the RIA you join.

A Solicitor is the insurance equivalent of putting a referring agent's number on the app for a certain % when they have handed a client off to you.
 
A Solicitor is the insurance equivalent of putting a referring agent's number on the app for a certain % when they have handed a client off to you.

What do you think about the solicitor arrangement ?

I don't like the idea of handing a client off and hoping it goes well. On the other hand one RIA told me .8% and no ongoing fees to be a solicitor with them.

Thanks!
 
Who owns the client relationship? If (and when) you choose to leave the RIA, do the clients belong to you? Or to the RIA?

Will the RIA do all client reviews and handle all client requests? Do you just enroll the client and then it's "hands off"?

My assumption (I hate that word) is that with a solicitor arrangement, the clients belong to the RIA and not to you. With little "skin in the game" of expenses on your part, that's probably where the arrangement is going to suck if and when you choose to leave that RIA.
 
Who owns the client relationship? If (and when) you choose to leave the RIA, do the clients belong to you? Or to the RIA?

I was wondering about that. I haven't read the full contract, just skmimmed through it. It does say:

In recognition of the highly confidential and proprietary nature of Adviser’s business methods and practices, you acknowledge and agree that for a period of twenty-four (24) months after termination of this Agreement for any reason (regardless of the circumstances surrounding termination), you, as a principal, agent, employee, consultant, stockholder, or in any other capacity, will not use, directly or indirectly, for your own benefit or the benefit of any third party, or take any action other than on behalf of Adviser with respect to, any of Adviser’s confidential information.

You further agree not to engage in any business similar or competitive with Adviser within a thirty (30) mile radius of any office maintained by Adviser.


This looks like it could be a non compete clause.

Also, if they have an office in a 30 mile radius of where you are located, it could be a problem. Not sure if that only applies to a "home office" or where other advisors of the same RIA are located.
 
I was wondering about that. I haven't read the full contract, just skmimmed through it. It does say:

In recognition of the highly confidential and proprietary nature of Adviser’s business methods and practices, you acknowledge and agree that for a period of twenty-four (24) months after termination of this Agreement for any reason (regardless of the circumstances surrounding termination), you, as a principal, agent, employee, consultant, stockholder, or in any other capacity, will not use, directly or indirectly, for your own benefit or the benefit of any third party, or take any action other than on behalf of Adviser with respect to, any of Adviser’s confidential information.

You further agree not to engage in any business similar or competitive with Adviser within a thirty (30) mile radius of any office maintained by Adviser.

This looks like it could be a non compete clause.

Also, if they have an office in a 30 mile radius of where you are located, it could be a problem. Not sure if that only applies to a "home office" or where other advisors of the same RIA are located.

You're better off being a solicitor for the 3rd party asset manager than the RIA. You can get fired either way but you're limiting your exposure since it is a lot of effort to switch SMA platforms vs. just cutting you out.
 
You're better off being a solicitor for the 3rd party asset manager than the RIA.

Interesting. Is this an option that exists out there ?

You can get fired either way but you're limiting your exposure since it is a lot of effort to switch SMA platforms vs. just cutting you out.

So you are saying the RIA can just cut the solicitor out, but if a solicitor is direct to the SMA platform it would be more difficult as the client would need to switch SMA platforms to do that ?
 
You can also start your own RIA. You will need somewhere around 5k to 10K to start, never have to worry who owns your book
 

Latest posts

Back
Top