Custodial flexibility, services fuel Ladenburg firm’s alternate corporate RIA
With custodian choice emerging as a key area of emphasis for independent advisors of all types, Ladenburg Thalmann’s corporate RIAs are growing by offering more such options.
The Ladenburg network includes three corporate RIA entities that each work with three or more custodial partners. Most independent broker-dealers work with only one or two RIA custodians.
Financial advisor Dianne Nolin of Argent Bridge Advisors, who affiliated with Triad Hybrid Solutions earlier this year, explains that the ability to keep the practice’s RIA custody with Fidelity Clearing & Custody Solutions and Schwab Advisor Services helped prompt her move.
Nolin also aligned with Ladenburg’s second-largest IBD, Triad Advisors, which reported this month that Hybrid Solutions has reached $2 billion in AUM. Fellow Ladenburg firms KMS Financial Services and Securities America have corporate RIAs with expanded custody options as well.
Such RIAs help IBDs obtain or retain assets managed by advisors who might otherwise launch their own RIAs or go fully independent. It’s no small issue: Ladenburg has disclosed that its registered BD reps with their own RIAs earned $220 million in compensation in 2018.
Hybrid Solutions has itself added $1.3 billion in AUM from Nolin and 30 other advisors who affiliated since January 2018. Most of the advisors were affiliated with other BDs before opting for Triad’s alternate corporate RIA, according to Hybrid Solutions CEO Michael Bryan.
“Industrywide, there's a search for scale,” Bryan says. “Advisors are feeling the need to really get a great professional resource for some of the more challenging aspects of the business these days.”
Nolin says that compliance, operations, human resources, marketing and websites comprise the main areas of support provided by Hybrid Solutions. The Vienna, Virginia-based team has $300 million in client assets, three advisors and four additional staff members.
Nolin joined Hybrid after parting ways from a business partner she had worked with for 24 years, dropping her affiliation with Spire Securities in May. She points out that clients may not notice a BD’s services, but they’re weary of altering day-to-day custodial account processes.
“I had a goal in mind when I made the move: I wanted the least amount of disruption for clients who made that move with me as I was launching a new firm,” Nolin says. “When it comes to people's money, they don’t want change.”
Nolin says Bryan’s team spent a day showing her around its Atlanta-area offices so she could meet the team members responsible for serving each part of the business.
At least four other teams are in the process of affiliating with 100-advisor Hybrid Solutions, a process Bryan says will be complete by the end of the year. The practices coming aboard since January 2018 ranged from $26 million in client assets to $590 million, according to Triad.
In contrast with the Securities America alternate corporate RIA having much less AUM than its main corporate RIA, Hybrid Solutions has double the AUM of Triad’s traditional corporate RIA. More than three-quarters of Triad’s 640 advisors have their own hybrid RIAs.
Triad “was hybrid before hybrid was cool,” Bryan says. “The key to success in providing services to independent advisors is to appreciate their fierce entrepreneurial spirit and to serve that spirit.”