Edj to RIA

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Feb 1, 2011 11:27 pm

Here are the details. Took over jones office 4 years ago. Over 28mm today, mostly a shares and individual stocks. Not much insurance business. Trailing 12 is over 170k. One million in advisory. RIA in townay be interested on taking me on. They have office space, assistant, and everything else in place. Realistically, how much could I expect (on average) to retain if I left. Looking for insight. Thanks in advance.

Feb 2, 2011 7:23 am

Originally it was around ten. I'd say at least 15-18 mil are there because of me. As to the fee based, i haven't made advisory a focus, but I can't say what the general consensus of my clients would be.

Feb 2, 2011 1:07 pm

Why go RIA if you don't focus on advisory? You should look at B/Ds or Hybrid shops.

You know your clients if you feel they will be ok with a complete change in fee schedules then it might work but who really knows.

Feb 2, 2011 3:37 pm

You might want to create a 2 year plan.  Begin to shift your current clients to advisory which will increase that t-12 over the next two years and make a final decision year 1.  I'd be scared to death of your situation and moving to all fee based.  The RIA across town will still be there.... if he's any good.

Feb 2, 2011 9:44 pm

do it.  I was EJ.  Went straight RIA.  At the time Jones, didn't have AS.   I went completely fee-based.  Make the leap. 

It always amazes me how frightened people are of it.  Grab your balls and do it.  You don't need a two year plan. 

Feb 4, 2011 10:56 am

I did it, but had $5mm in AS at the time.

I would say of that $28mm, maybe $10-15mm would be advisory candidates.  Keep in mind, you're not going to want small clients (for the most part, 100K should be a minimum for an RIA), and many of those clients are probably sitting in bonds, CD's, MMKT, individual stocks you can't liquidate, etc.

I would think worst case would be $10mm.  Best case is probably $15-18mm.  But I also don't know your client base.

But even in the WORST case, you are probably looking at 100-125K in recurring fees.  And after expenses, will probably net you more than at Jones.  And going forward, all new assets/revenue is gravy.  Of course, it depends on what the RIA wants to pay you.  If your payout will be 60%, you might think twice.  Maybe wait a few more years, and begin focusing more on advisory business.  Depends on the payout and what you can afford to do.

Changing them to fees is not as big an issue as it seems.

Feb 4, 2011 1:37 pm

Hey, B24, did I read that right that you converted to the dark side?  I wondered why we hadn't heard much from you for the last couple of months.  I figured you were over on the other site.  Congrats.  I don't think there were many of us here that figured you would be at Jones very much longer. 

Feb 4, 2011 9:41 pm

[quote=Spaceman Spiff]

Hey, B24, did I read that right that you converted to the dark side?  I wondered why we hadn't heard much from you for the last couple of months.  I figured you were over on the other site.  Congrats.  I don't think there were many of us here that figured you would be at Jones very much longer. 

[/quote] Who are you talking about??? You mean RR members in general or Jones guys? For EJ vets, it was just you, B24 and some tumble weeds that drifted through the forums. Now you are all alone.