I alluded to this in another post, but my observation (since I am not Indy)

on indies in my area is that they cover much more avg AUM territory than

wirehouse/regional B/D advisors. I have seen stable indy advisors with as

little as 10-15mm AUM and get by just fine, as well as a few firms in that

"mature" or “market dominator” realm. This is because the unique thing

about independants is that they have the flexibility in cost structure and

are scalable. Thus, they can be very, very small, or very, very large (and

of course anywhere in between).



Honestly, I see more indies in my area that are in the very, very small

arena (many are B/D washouts). But there are two specific firms I know of

with over $1B in AUM.



That’s the cool thing about being Indy - sky’s the limit.

If you try to be all things to all people, the independent RIA model will

fail.



If, however, you plan on existing primarily as an asset manager and are

paid a fee to manage assets on a discretionary basis only, you’ll quickly

find that you can manage accounts for a thousand IRA accounts (as an

example) at the drop of a hat.



Just my take.



C

Broker, by Indy, do you mean independent b/d - which I believe is the traditional meaning - or do you mean RIA?

Yes, Captain, I see what you mean. There is an interesting manifestation of that concept, The Mutual Fund Store, which is a franchise in various cities, with a national radio show. Maybe you know them. They suck in tons of IRA rollover money, and charge 1.5% fee along with no load funds, model portfolio of home office researched funds, a simple story and turnkey for the local owners.

Of course, you have to keep up the personal relationships, and in that sense, are limited by your time and memory.

My sense is things are evolving very quickly now in the industry, I guess I'd like to see the whole (increased) RIA world go through a severe market downturn, and see how it gets handled by the media, regulators and such.

I just have a sense that smaller RIAs might get hammered ( perhaps through isolated examples that add up in the media) - it seems a lot of small shops are giving clients what they want, in terms of risk and portfolio allocation. Just a sense. That takes nothing away from RIAs who are doing it right, but I'm not sure the market forces have perfected the platform in general. Maybe I'm just being paranoid, I really like being a well compensated solo shop with lots of free time, not sure about the risks of going RIA solo. And don't have any prospective partners, that would be a little like getting married, anyway.  

Great stuff, Silouette