Hybrids

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Oct 18, 2008 8:57 am
I just learned that Fidelity has the HybridOne platform.  Maybe it's new, maybe my heads been in the sand.  Any feedback on HybridOne?  Also, does Schwab have a hybrid playform?
Oct 18, 2008 9:52 am

It's so new it has not yet been launched, just announced.  It is supposed to be available when the new WealthCentral platform is rolled out sometime soon (Q4).

I believe Schwab has a hybrid platform with Cambridge, if you affiliate with them. 

What feedback are you looking for?

Oct 18, 2008 9:34 pm

I hate to sound self-serving here but just as a matter of record, my firm, Trade-PMR also has a Hybrid Program.  There are others of course as Morphius pointed out.  Some characteristics of many Hybrid Programs:


1. Broker Workstation integration between commission and fee business


2. Integrated Client Statement between fee and commission accounts


3. Ability to operate your own RIA firm
 
4. Some Hybrid Programs require you to pay a haircut to the B/D for your RIA business while others do not and may also charge 'admin charges' on fee assets
 
According to Moss Adams I believe, the Hybrid Advisor marketplace is the fastest growing segment of the various business types.  Some Advisors may use a Hybrid Platform as a transitional bridge before they go Fee-Only while others view commission business as an integral cornerstone of their practice and they have no intention to go Fee-Only.
 
It should be noted however, Hybrid Programs are not limited to simply working with an RIA Friendly B/D.  Other unique Hybrid Programs may include:
 
A) Advisor Establishes a limited application only B/D (all commission business done direct with vendors -- no clearing firm involvement) while working with an RIA Custodian Firm for their investment advisory business.
 
B) Advisor (or a group of Advisors) establish a B/D with a full-clearing relationship while continung to use an RIA custodian for their investment advisory business.
 
Good Luck to you!
 
 
Mar 28, 2009 1:39 pm

Is there a way to locate Indies using hybrid platforms in my area? Do you think they would give me some of there time if I offer a meal or something?

Mar 29, 2009 1:15 am

Jaxson - Talk to a Fidelity RIA rep; they can put you in touch with advisors who are getting set up on HybridOne in your area. I think Pershing and Schwab can similarly help (although it might be a little more cumbersome). We're an RIA and have looked at all three of these. but we happen to already have a limited lines b/d so we have other options too.

Mar 29, 2009 12:12 pm
JAXSON:

Is there a way to locate Indies using hybrid platforms in my area? Do you think they would give me some of there time if I offer a meal or something?



Jaxson

< ="-" ="text/; =utf-8">< name="ProgId" ="Word.">< name="Generator" ="Microsoft Word 11">< name="Originator" ="Microsoft Word 11"><>

The one item that I think most advisor's do not get is that
there are two parts to the advisor's world:  One is RIA and the other is
BD.  Most advisors will look for a BD to affiliate with and think that is
going independent.  I think that avenue is a hit or miss.  My first
three clients asked me get them out of their indy BD situation after a
year.  One was the largest ML producer in Arizona.  Opening up you own RIA firm
is fairly straight forward and you can do that with ZERO assets.  BD is a
different situation.  BDs are harder to setup.  For adivisors that
want a BD relationship I have a series of BDs that I will refer clients. 
The mistake most make in this model is the advisor will create a relationship
with a BD and the BD wants a percentage of the RIA business.  So now as an
advisor you are thinking, what is the point why don't I just join an indy
BD.  Well I have relationships where the BDs does NOT take a percentage of
the RIA business.  So now you as the adivisor own your own firm making a
100% of the revenue (no markups on the products) and about 80-90% on the BD
business.  And you NEVER have to ask your clients to sign another account
transfer form!!! 



Give me a call if you want to learn more.  Adivsors usually have a lot of questions.... to many for a forum.

Good Luck.

ash

[email protected]

Mar 29, 2009 12:15 pm

Sorry hit return by mistake...

Also note I am not a recruiter!!

ash
[email protected]
www.FAfreedom.com
609-945-7100 x 101

Mar 30, 2009 10:41 am
Ash:

Well I have relationships where the BDs does NOT take a percentage of the RIA business.



Give me a call if you want to learn more. Adivsors usually have a lot of questions.... to many for a forum.



Ash,



I agree entirely with the basic point about FAs being ignorant about what constitutes going "independent," and the advantages for many of launching an RIA instead, but it's misleading to infer it is because of your "relationships" that people can get access to a B/D who will not take a percentage of your RIA business.



As you know, your relationships with these B/Ds has nothing to do with whether or not they take a cut of an advisor's fee business. People can get access to such B/Ds directly simply by picking up the phone and calling them. That's how I started my "relationship" with a fee friendly B/D who operates exactly as you describe.



I don't begrudge you offering your services to people, Ash, but be careful about misleading people about your value-added proposition. You can certainly provide value by sharing your experience and knowledge of, for example, which b/ds choose to operate with this model, which is enough. You don't need to imply the importance of an exclusive relationship to drum up business.



And speaking of which, if you think this is a good place to generate prospects, as I imagine it is, you might do the decent thing and also buy an ad here. Constantly freeloading gets old and is not really good for anyone's business building image.



It sounds like you have some helpful experience to share with people, so I'm sure many including myself would really like to see you stick around. But I think your time here would be more fruitful (and appreciated) if you try to focus on providing answers that demonstrate the type of expertise or help people might expect from you rather than urging everyone to call you. And with the contact info in your signature you will no doubt still pick up some business along the way anyway.





Mar 30, 2009 11:24 am
Morphius:
Ash:

Well I have relationships where the BDs does NOT take a percentage of the RIA business. 



Give me a call if you want to learn more.  Adivsors usually have a lot of questions.... to many for a forum.






As you know, your relationships with these B/Ds has nothing to do with whether or not they take a cut of an advisor's fee business. People can get access to such B/Ds directly simply by picking up the phone and calling them. That's how I started my "relationship" with a fee friendly B/D who operates exactly as you describe.






It sounds like you have some helpful experience to share with people, so I'm sure many including myself would really like to see you stick around. But I think your time here would be more fruitful (and appreciated) if you try to focus on providing answers that demonstrate the type of expertise or help people might expect from you rather than urging everyone to call you. And with the contact info in your signature you will no doubt still pick up some business along the way anyway.







Morphius:

I want to thank you for your helpful comments.  One item that I am confused about is your BD comment.  Most of the adivisors that have tried the RIA/BD model have had BD wanting a piece of RIA revenue due to compliance rules.  The BDs I work with have normally charge a fee on the RIA business.  But it sounds like you found something different, so you are teaching me something.  I would love to be able to share the BDs names you encountered.  To be open I really do not like getting involved in the BD side, I simply refer advisors to the BD.  To have an expaneded list only helps the advisor.  

I will also add that I have the opinion that most independent advisors do not need a BD.  There is so much conflict that it is not worth it.  There are many articles on this subject, so I will leave that alone for another day.

As far as calling comment, I get it.  I will tone it down, but I honestly feel like most do not get it until there is a good converstaion.

thanks again.

ash

Mar 30, 2009 7:52 pm
Ash:

The BDs I work with have normally charge a fee on the RIA business. But it sounds like you found something different, so you are teaching me something.


You seem to be contradicting yourself, since now you seem to be saying your b/ds normally DO charge something on the RIA business, but in your earlier post you said:

Ash:

Well I have relationships where the BDs does NOT take a percentage of the RIA business.


Are you now saying you do NOT know of any b/ds that do not take any cut on an advisor's RIA business?! I'm confused as to what you are even saying.



Ash:

To be open I really do not like getting involved in the BD side, I simply refer advisors to the BD. I will also add that I have the opinion that most independent advisors do not need a BD. There is so much conflict that it is not worth it.



I agree that there are a lot of hassles and complications (compared to straight RIA) that arise from doing brokerage business and the need to have a b/d.



However, to say that most independent advisors don't need a b/d seems to be an overstatement. I think the amount and type of book you run is the key issue. Obviously those with very little existing or prospective brokerage business don't need the hassles of a b/d, but those whose business involves a significant amount of brokerage business need one, regardless of whether they are with an independent b/d or not.





Mar 30, 2009 8:02 pm
Morphius:
Ash:

The BDs I work with have normally charge a fee on the RIA business.  But it sounds like you found something different, so you are teaching me something. 


You seem to be contradicting yourself, since now you seem to be saying your b/ds normally DO charge something on the RIA business, but in your earlier post you said:

[quote=Ash]Well I have relationships where the BDs does NOT take a percentage of the RIA business.


Are you now saying you do NOT know of any b/ds that do not take any cut on an advisor's RIA business?! I'm confused as to what you are even saying.



Sorry if my statements were confusing... I have two BDs, but if you have a larger list I would love to offer anyone I meet the more BDs and let the advisor make up their own mind.  I can help the advisor this decision, but usually advisors do a good job here as they understand BDs fairly well.

BD vs. RIA - I understand your point, but so far most of my clients have either dropped their FINRA licences or they have decided to transition within the next 2-3 years. 

ash
www.FAfreedom.com - The Breakaway Experts
609-945-7100 x 101

Mar 30, 2009 10:39 pm

Let's make this very simple and clear, rather than continuing to go around in confusing circles.



To be very clear and answer your question: I not only know of a B/D that does not take a cut on the RIA business, I am also already affiliated with one.



Now, can you be clear and answer my question: do you or do you not recommend B/D's that do not take a cut of the RIA business?





Mar 31, 2009 8:29 am

Wow, I'm glad you two got that straight? But, I must say, I am personally not ready to start operating on a hybrid platform. I would, however, like to meet and discuss some of the advantages and disadvantages with an FA that is using this platform (preferably face to face). Can you all let me know of different hybrid platform providers or a location to such a list? Thanks

Mar 31, 2009 8:40 am
Morphius:

Let's make this very simple and clear, rather than continuing to go around in confusing circles.



To be very clear and answer your question: I not only know of a B/D that does not take a cut on the RIA business, I am also already affiliated with one.



Now, can you be clear and answer my question: do you or do you not recommend B/D's that do not take a cut of the RIA business?






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It looks like I misunderstood you completely, but the short
answer is yes.  But let me give a more
extensive answer for the rest of the readers. 
There are three models for independence: 
Independent RIA/BD Firm, Advisor Owned RIA, and Advisor Owned RIA with
Affiliated BD.

Independent RIA/BD Firm Independence Model

In this model the advisor is Employed by the firm as an IAR
and broker.  The firm owns the RIA and
the BD.  The firm supplies the platform
and a payout grid.  The advisor gets paid
based on this grid. 

Advisor Owned RIA

In this model the advisor registers the firm that they own with
the SEC or State as a Registered Investment Advisor.  The advisor is owner and IAR of the firm.  Most will use a major Custody BD firms
like Schwab, Pershing, or TD.  In this
relationship with Schwab, Pershing the advisor is acting as an agent for the client
to execute the trade.  The fees that the
client typically pays for is your advise fees plus the transaction fee that
Schwab or Pershing charges.   You are not
allowed to charge a commission on the transaction as a RIA.

Advisor Owned RIA and Affiliated BD

Once again the advisor owns the RIA, but now also has some
BD revenues.  BD revenues could consist
of trails, commissions, etc.  In this
model the advisor will own their RIA and then also Affiliate with an
independent BD firm.  From my experience most
BD firm will charge you a percentage of your RIA revenue to affiliate with
them. 

In the Advisor Owned RIA and Affiliated BD model, I do have
relationships with two independent BDs that will not charge a percentage of RIA
revenue for using their services.  Do I
typically charge to disclose this information, of course not.  But I do ask that you allow me to make the
introduction so that I can potentially get some reverse business.  

I hope this clarifies things.

Ash

[email protected]

www.FAfreedom.com

609-945-7100 x 101

Mar 31, 2009 9:31 am
Ash:

In the Advisor Owned RIA and Affiliated BD model, I do have

relationships with two independent BDs that will not charge a percentage of RIA revenue for using their services. Do I typically charge to disclose this information, of course not. But I do ask that you allow me to make the introduction so that I can potentially get some reverse business.



I'm glad to hear you don't 'typically' charge to disclose readily available information about B/Ds. But so that we can better understand your personal interests in this, what do you mean by "some reverse business" from these B/Ds? What exactly are the sources of your revenue, and what they are based on?



P.S. Why do you continue to post using hyperlinks? It only makes reading or quoting your posts more difficult.

Mar 31, 2009 9:53 am
Morphius:
Ash:

In the Advisor Owned RIA and Affiliated BD model, I do have

relationships with two independent BDs that will not charge a percentage of RIA revenue for using their services. Do I typically charge to disclose this information, of course not. But I do ask that you allow me to make the introduction so that I can potentially get some reverse business.



I'm glad to hear you don't 'typically' charge to disclose readily available information about B/Ds. But so that we can better understand your personal interests in this, what do you mean by "some reverse business" from these B/Ds? What exactly are the sources of your revenue, and what they are based on?



P.S. Why do you continue to post using hyperlinks? It only makes reading or quoting your posts more difficult.



Sorry about the hyperlink.... i wrote in word and pasted.  For some reason it comes out as a hyperlink.

Reverse Business - when an advisor comes to them and wants to open their own RIA firm, they refer that advisor to me.  Many times they will get wirehouse advisor confused about what they need to do, once again they will point my way. 

I work purly as a vendor to the advisor.  I either charge a flat fee or an hourly fee based on the project.  Once the project is completed, the advisor determines the next project.  I am also starting to put together packages.  For instance compliance:  I will create and update an advisor's customized compliance manual on an ongoing basis for an annual flat fee.  This way advisors do not have to keep up with the latest rules.  Additionally I will also help with their annual compliance testing and review process. 

thanks,
ash

Mar 31, 2009 10:28 am

Thanks for the clarification on how you are paid - and for getting away from the hyperlinks. Both are appreciated.



What do you typically tell a new prospect contemplating working with you - say a wirehouse breakaway broker - that they should budget for your fees in order to help them get up and going with one of the major custodians and a fee-friendly B/D? I assume it would vary significantly depending on circumstances, but a typical range at least?

Mar 31, 2009 11:57 am
Morphius:

Thanks for the clarification on how you are paid - and for getting away from the hyperlinks. Both are appreciated.



What do you typically tell a new prospect contemplating working with you - say a wirehouse breakaway broker - that they should budget for your fees in order to help them get up and going with one of the major custodians and a fee-friendly B/D? I assume it would vary significantly depending on circumstances, but a typical range at least?




The custodians do not charge a setup fee, so most of the costs are related to office setup.  For a single advisor my fee is normally 5K.  I will coach the advisor through the process for six months. 


thanks,
ash

Mar 31, 2009 8:58 pm

Ash,



As an dually registered RIA myself I am quite familiar with the fact that custodians do not charge a setup fee. I simply mentioned the custodian & B/D scenario to try and get some idea of your fees for a typical, plain vanilla scenario transition. Thanks for clarifying your usual fees.

May 12, 2009 11:54 pm

Pardon me for bringing up an old post, but i thought it would be better then starting a new one.

 
I am begining to research various hybrid platforms and would appreciate some input from IARs on the platforms their RIA uses. I would like to make sure to learn as much as possible about each. My question to those IARs at Hybrid RIAs is....
 
What platform do you use, who provides it and what can you say positive about it?
 
p.s. I am aware of several already but would like to make sure each is mentioned for myself and others looking at this option.