Advice needed for a new RIA
I am planning to start a RIA to manage accounts using value strategy. I have recently passed series 66. To start with I am expecting to have $2-$5MM in the first year. I . A few questions
1. Fees - Does this make sense
< 100K - 2% AUM
100 - 500K - 1.5% AUM
500K+ 1.25% AUM
I am also giving an option for HNW individuals if they want, they can go with performance fees structure
25% with hurdle rate of 6% with high water mark and no other fees
Having performance fees - will it be an issue to get adv approved? I do not mind removing the performance fees but few of my potential clients could ask for that option because the do not want to pay they do not get atleast 6%
2. Soft dollar arrangement.
I am currently saying no to Soft dollar arrangement? Should I go with it or not? Does this make a difference to get a free research
3. Average fees per hour - If some client wants to review their portfolio or 401K? What is the industry standard/
$150/hr or $200/hr?
4. Planning to use IB as broker - Any thoughts
5. I want to get Capitl IQ but I came to know that it costs 25K per license per year. Any other options for fundamental data / research
Thanks again for all your help. I really appreciate it
In my state you need 65, not the 66.
1. agressive fee structure if you do not have past performance, I charge 2% on everything less than 1mm and 1.5% above. Nothing less, no exceptions.
2. performance fees might want to charge 2/20 even in down markets you have to get paid, and in down markets you should be able to minimize losses which you need to be compensated for.
3. 150/hr is pretty standard, depending of net worth of clients 200/hr might be a stretch.
4. I use IB, love it. Great low cost platform.
5. I do all my own research, doesnt make sense to pay for it. Maybe you feel differently.
Hope this helps