I’m currently with a Independent B/D, have about $90 Million AUM and primarily handle the “mass affluent” market ($250k to $1 Million household size). About 50% of my practice is fee-based advisory using mostly mutual funds and ETF’s. The rest is split between A shares, C shares, and VA’s. There is a large high-end CPA/Consulting firm here in town (50 plus CPA’s) that wants to start an investment management arm. They do not have one as of now. They’ve had some loose referral arrangements in the past. I’m friends with one of the managing partners and he wants to discuss having me involved in this. Although they’d be starting from scratch, he’s told me that it could grow north of $100 Million fairly quickly given the types of clients they serve.My question is: how should this be structured to allow me to continue to service my current client base (preferably under my same b/d) and also partner with the CPA firm to gain access to higher dollar clients? My first thougt is that the CPA firm should start their own RIA. Can they do this with no existing assets? If they do this I realize I could not work under their RIA and my current B/D. My second thought is for me to set up a second rep number and seperate branch office at their firm but still have both rep codes under my current b/d. The rep code for the CPA firm would only handle larger advisory accounts and fees would be split between me and the CPA firm. I would continue to have my current practice and current business card and then a new practice with a new business card using with the name of the CPA firm on it (I'm not sure my compliance dept would allow this). My third idea is to help them start their own RIA Hyrid model and transfer my fee based portion of my book to their RIA and my commission based to the B/D within the hybrid RIA. Any fees from my transferred clients would be 100% mine and any fees from new business would be split. But I really don't want to have to have my clients sign ACAT forms as I just went though all this a few years back when I left a wirehouse. Any ideas??? Anyone have experience with this sort of thing?
I know this can vary by state, but in my state you have to throw out non RIA options unless all of the CPA’s want to get licensed (series 7). RIA is the only option here. One option my BD has is for the CPA firm to open their own RIA (yes they can with zero assets) and you pay their RIA a percentage of the revenue. One owner has to get a 65 or 66.