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Starting RIA looking for custodian

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Dec 26, 2014 9:50 pm

I'd like to start my own RIA.  I am looking for a custodian.  I want one that has a recognizable name and very good software and reports.  So far from what I've seen I like TD, Fidelity, and Interactive Brokers.

Mar 10, 2015 3:38 pm

If you are opening an RIA it shouldn’t matter what custodian “name” you pick. Your clients should really only know your “name”. I am a hybrid mainly because I want the flexibility for some of my clients kids that don’t have a lot of assets (I don’t put someone in RIA billing under 100K). All those places have this option. Also might want to look at Schwab (great tech).

I am always a little weary about people that have been in the business and all of a sudden want to go straight RIA. Not all of them but most that I have met are only doing it because they want out of FINRA regulations or have U4 issues. Of course, not all are that way. I just can’t see giving up an advantage to my clients that they might otherwise have. For example, I have clients that I charge a fee on one account but not on an account that holds just CDs and bonds. Why charge a fee for assets sitting in in fixed income? Just a thought.

Mar 26, 2015 8:54 pm

I’d pick the custodian somewhat based on the investment approach. Are you outsourcing the management? What types of securities are you using? Etc. Some custodians have better pricing based on these types of factors. We’ve been fee only for over 4 years and it has been wonderful relative to our experience in the BD channel. I actually think the name recognition can help. Your RIA (nor most others) have name recognition, but you can work that in your favor by being more main street. The custodian can help bring the financial strength argument to the table. Good luck.