To BD or not to BD
- Thread starter Boodrow
- Start date
eersfan
Super Genius
- 200
Based upon your level of AUM, you're subject to more scrutiny as an independent. In addition, you have to have measures in place to capture and archive all email.
eersfan
Super Genius
- 200
If you would like some information on my BD, send me a private message.
It depends on how much AUM you want and what type of assets you will be invested in. When you are independent you still have to custody assets somewhere unless you just prepare financial plans and give list of recommendations for clients to follow. I would never want to work for a BD because I would be under FINRA. If you are a state registered RIA, you can manage up to 100 million, over that you have to register SEC. Some folks say SEC is worse than FINRA, I think they are equally inefficient.
If you are independent, you are your own Chief Compliance Officer. Can you handle that? Now as an independent I cant sell A shares or collect 12b1 fees, however, I can sell F shares and collect a fee. There are more and more choices for RIA's for fee driven VA's, but the choice on the BD side is much more right now.
When you retire your business will be worth more to sell if you are independent. BD has to approve who will take over your business. If you just starting out collecting AUM, I would build a business of about 10 to 15 million AUM A shares with a BD and then start your own RIA. If you build it with American funds, you can switch it all to F shares when you leave. If you plan to go independent, don't sell BD's own funds.
If you start on your own, I think it is very hard to make the math work without other income. If you get 1 million AUM a quarter and charge 1%, you will make 20K in your 1st year before expenses.
If you are independent, you are your own Chief Compliance Officer. Can you handle that? Now as an independent I cant sell A shares or collect 12b1 fees, however, I can sell F shares and collect a fee. There are more and more choices for RIA's for fee driven VA's, but the choice on the BD side is much more right now.
When you retire your business will be worth more to sell if you are independent. BD has to approve who will take over your business. If you just starting out collecting AUM, I would build a business of about 10 to 15 million AUM A shares with a BD and then start your own RIA. If you build it with American funds, you can switch it all to F shares when you leave. If you plan to go independent, don't sell BD's own funds.
If you start on your own, I think it is very hard to make the math work without other income. If you get 1 million AUM a quarter and charge 1%, you will make 20K in your 1st year before expenses.
- 11,277
How much are you willing to let a B/D control your insurance business, marketing, and other activities?
What companies offer fee based VA's? I haven't seen them (or looked into it)
To the OP... you can be an IAR for an RIA firm, then all the headaches are handled by the RIA. Or you can establish your own RIA firm...
- 11,277
Jackson's advisory annuities are probably the most well-known:
Jackson - Annuities & Retirement Planning | Jackson
Jefferson National is my favorite for non qualified funds. VA's with no surrender charges, extremely low M&E fees, they can collect the fee for you and just ACH you. Pretty good investment managers to choose from. They got bought by Nationwide and they are planning to add more riders from what I understand. Great sales support.
If you are fee only advisor, you can use Vanguard VA's, their customer service is terrible.
You have to get appointed with Jackson to sell their VAs. Independent RIA's dont have to get appointed to sell with Jefferson National.
If you are fee only advisor, you can use Vanguard VA's, their customer service is terrible.
You have to get appointed with Jackson to sell their VAs. Independent RIA's dont have to get appointed to sell with Jefferson National.
eersfan
Super Genius
- 200
I am fortunate in that my BD is owned by the largest independent insurance broker in the country. The support I get from my BD is phenomenal. Since they are tied in with the insurance broker, I have full access to the specialists there. My costs are almost 50% less than what I was paying at my previous BD. I learned after I left they were marking-up the E&0 coverage to the tune of $100/month.
Similar threads
