RIA doing business with a bank

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Jun 7, 2009 3:11 pm

Are any of you familiar with a set up where a bank will send business to an RIA in exchange for a % of the fee? Is this even allowed?

Jun 8, 2009 9:02 pm

It's certainly allowed, but would need to be disclosed. Depending upon the bank, it could be very sweet.

Jun 9, 2009 9:16 am

Do you know what percentage of the fee the banks usually require?

Jun 10, 2009 4:35 pm

It depends on a wide variety of different factors.  I've been helping one of my RIA Firms with this recently.  Factors to consider:

 
1. Will they be providing any office space, equipment, etc.,?
2. Will they provide for a referral program with the CSRs, Loan Officers, Tellers, etc., or perhaps both the Bank and the RIA will contribute (watch out for laws concerning this)
3. How supportive is Senior Management of the initiative?  The MOST important aspect of working with a community bank and credit union is Senior Management Support?
4. Will Branch Managers be judged on their annual review how supportive they are of the investment program?
 
Feel free to call me if you need further help.  Prior to my going RIA, I worked a lot in the Bank Brokerage Environment and know the in's and out's.
 
888-579-8640
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