Creating own B/D

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May 21, 2007 6:32 pm

This might be a rediculous question, but why do so many advisors go to an Indy B/D like RJF instead of just creating their own B/D-RIA?  This is an idea that I am currently considering in the next 2-3 years (not quite at the stage to pay someone to tell me about it, but soon enough).  Do you guys have any input on the process?  I am really looking to literally build my own company from the ground up.


Currently, I can think of administrative costs, legal fees, and litigation exposure being the foremost hurdles, am I fundamentally missing something?

May 21, 2007 7:24 pm

Do you want to own a broker/dealer or do you want to be a broker/rep/advisor?


What are you trying to accomplish? 



May 21, 2007 9:35 pm

Piker, I have a close relative that worked for NASD Regulations for 30

years. He is now a Security Compliance Consultant (helping small B/D's

set up compliance procedures, write their manuals, conduct annual AML

audits, respond to NASD Examinations, etc.). I spoke with him about this

very topic once. He said it is next to impossible these days without some

SERIOUS money and resources (you would need a sizeable staff to pull it

off). It is NOT like setting up your own RIA. Think about what you do as

an RIA, versus what your B/D does.



I can't give you many details, as I really never pursued it any further, but

those were his words.