RIA vs Independent BD

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Jun 29, 2005 7:38 pm

Whats the difference between an RIA with no bd and an independent rep with a bd??


Jul 1, 2005 9:31 am

Major distinction is that an RIA w/ no b/d has no securities licenses, so is strictly doing fee-based advisory and/or financial planning business through their RIA.  Rep with an indy b/d is securities licensed, so is not limited to just fee-based biz.  Indy reps would be operating through their b/d's corporate RIA, plus most indies would allow their reps to also have their own RIAs.

Jul 1, 2005 9:49 am
Duke#1:

Major distinction is that an RIA w/ no b/d has no
securities licenses, so is strictly doing fee-based advisory and/or
financial planning business through their RIA.  Rep with an indy
b/d is securities licensed, so is not limited to just fee-based
biz.  Indy reps would be operating through their b/d's corporate
RIA, plus most indies would allow their reps to also have their own
RIAs.





Are you saying that as an indy you can receive a commission for placing
me into a portfolio that you also earn a management fee on?



Double dip, so to speak.

Jul 1, 2005 10:06 am

No. It is an either or situation.  You have a client who is fee based either through yourself as an RIA or use the B/D manged assett prgram or another 3rd party provider.  For those clients who are not fee based, they stay on as commission accounts.  No double dipping. 

Jul 1, 2005 10:17 am
babbling looney:

No. It is an either or situation.  You have
a client who is fee based either through yourself as an RIA or use the
B/D manged assett prgram or another 3rd party provider.  For those
clients who are not fee based, they stay on as commission
accounts.  No double dipping. 





Can the same client have money invested in such a way that you receive
a fee while having other monies invested in such a way that you earn
commissions?

Jul 1, 2005 10:33 am

Yes, that would be so for insurance products.  For example if you have clients who have equites in the fee based account, yet also have a need for estate planning (2nd to die) life insurance, buy sell funding for small business owners, executive bonus or long term care insurance and so on: you would get a commission on the insurance products if you were the agent.  If the RIA or Rep is  not licensed, then they would refer the client and someone else gets the commission on those products.    Insurance products (at least to my knowledge) cannot be held in a fee based account.    Subject to another thread here, I have a real problem with cash instruments such as money markets and CDs being held in fee based accounts.  I think that is just plain wrong.

Jul 1, 2005 12:04 pm
babbling looney:

Subject to another thread here, I have a
real problem with cash instruments such as money markets and CDs being
held in fee based accounts.  I think that is just plain wrong.





No doubt the "Fist full of Forex" types consider you to be some sort of
morals fanatic.  What a great way to convert client assets to
broker assets--charge a fee to manage their cash.



Not as good as a good old fashioned flogging in the penny stock market, but not bad.



Didn't anybody ever tell you that a client who is so stupid as to pay a
fee for managing cash is going to get screwed by somebody, why not by
you?

Jul 1, 2005 1:21 pm

Didn't anybody ever tell you that a client who is so stupid as to pay a fee for managing cash is going to get screwed by somebody, why not by you?


Well......lets see, why not me.


Because I like to sleep at night.  


Nothing travels faster than bad news in a small town.


I prize my reputation.


I refuse to sell my soul for a buck.


What goes around comes around.


Karma is a bitch.


Jul 1, 2005 1:27 pm
babbling looney:

Didn't anybody ever tell you that a
client who is so stupid as to pay a fee for managing cash is going to
get screwed by somebody, why not by you?


Well......lets see, why not me.


Because I like to sleep at night.  


Nothing travels faster than bad news in a small town.


I prize my reputation.


I refuse to sell my soul for a buck.


What goes around comes around.


Karma is a bitch.





Just another moron fixated on morals, doing right, and all that.



I'll bet you don't even believe in a good rainbow party--you're way too old to be cool.

Jul 1, 2005 2:26 pm

Put, it's time for you to take your Zoloft or Prozac pill again.