Asked and Answered: Can RIAs Go Independent Without Going It Alone?

Going independent may have a lot of appeal for advisors who have spent a while working in banks or large brokerage firms. But not everyone is cut out to be a business owner. Running an RIA day-to-day involves entirely new skill sets for most people, and also takes time that could otherwise be spent advising existing clients and prospecting for new ones.

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Comments (1)
Within the brokerage industry there is no large scale institutionalized support for fiduciary standing that makes advice, safe, scalable, easy to execute and manage. RIAs have no scale and broker/dealers with scale will not acknowledge fiduciary standing of the broker. It is long established that broker/dealers, whether large or small, independent or employee firms do not acknowledge or support fiduciary standing. So, RIAs aligning with an independent broker/dealer for their support of fiduciary counsel essential for an RIA to function is at best highly misleading.

Just ask the broker/dealer whether it is responsible for and supports in writing the advice its brokers are rendering.

Not one such firm exists. Such permission to act in a fiduciary capacity is very rare and is only granted by exception of circumstance and the broker's skill. Otherwise, brokers do not render advice and it is a violation of internal compliance protocol for brokers to acknowledge they render advice and have ongoing fiduciary duties to act in the client's best intererst.

Posted by Stephen W | Monday, March 26 2012 at 8:41PM ET
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