Starting An RIA – Challenges You Will Face and How To Be Prepared

May 13, 2024 | Starting an RIA

Whether you’re planning to start your own RIA firm, transition from a broker-dealer, or need a fresh start in building your independent advisory practice, we understand the challenges involved. Breaking through that glass ceiling and creating a “lifestyle” practice that you and your clients can trust is no easy feat. The benefits of independence are significant, but several critical points need careful consideration. Let’s explore a few of them.

Support Services

One of the biggest challenges financial advisors face when leaving a broker-dealer or RIA is the loss of support and resources. You’ll need to consider comprehensive resources like technology, software, compliance, and back-office support. The responsibility for a wide range of investment products will also fall on your shoulders. This can be particularly daunting if you’re just starting out or even if you’re experienced but lack the financial resources to hire a team of professionals to provide these services and implement them efficiently into your practice.

Lead Generation and Digital Solutions

Growing your practice should be your top priority, but lead generation and working with new prospective clients can often take a backseat to implementing necessary infrastructure. Building your client base requires a significant investment of time and money, including developing a marketing plan, building a website, and attending networking events. You’ll also need to establish relationships with potential clients and convince them of your expertise, stability, and experience. This can be especially challenging if your AUM is minimal or a prospective client represents a large percentage of your overall AUM.

Regulation and Compliance

New firms face the challenge of complying with a vast range of ever-changing regulatory requirements. At established broker-dealers and SEC RIA firms, compliance support is typically provided by the firm and often taken for granted. While you can choose to outsource your compliance needs, you’ll still be the CCO of your firm and solely responsible for ensuring compliance with all regulatory requirements. New state-registered RIAs must be prepared early on for regulatory audits, as states have become more proactive in auditing new firms to ensure they manage all aspects of client and firm regulatory compliance. It’s imperative to ensure your actions align with what your ADV and client documents and disclosures state.

Economics and Practice Management

Managing your finances is crucial. In addition to your personal and family expenses, office space, technology, and software, you’ll incur additional costs of implementing your RIA and ongoing expenses. Whether you embrace this challenge or find it daunting, expect the unexpected. As a new business owner, this mindset will serve you well no matter what path you take in life and business.

A Viable Solution – Advisor Launch Pad

Powered by SimplyRIA, the Advisor Launch Pad Program supports advisors looking to break away from a broker-dealer or FMO-based RIA. It’s designed for professionals seeking a fresh start in an entrepreneurial environment that embraces true independence. The program offers a plethora of capabilities and an “outside the box thinking” mentality.

Starting your own firm is great in theory, but finding a place that feels like home is even better. Consider trading the minutiae and sleepless nights for an RIA model that can help you break through that glass ceiling and build your own lifestyle practice to best serve your clients.

Discover the Advisor Launch Pad Program and see if it’s the right path for you. Join an awesome team of people ready to help you achieve your goals.

To learn more about this program, visit us at:  https://www.advisorlaunchpadprogram.com/

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Financial professionals are encouraged to conduct their own research and due diligence and consult with their legal, tax, and financial advisors before making any investment decisions. The content provided is based on information available at the time of publication and is subject to change without notice. We do not guarantee the accuracy or completeness of any information presented and shall not be liable for any errors or omissions or for any actions taken based on the information provided.

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Why Experienced Advisors Should Start an RIA

Why Experienced Advisors Should Start an RIA

Starting a Registered Investment Advisor (RIA) firm can be a transformative move for experienced financial advisors seeking greater control over their practice, enhanced client relationships, and increased financial rewards. Unlike the traditional broker-dealer model,...

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