An offer from an RIA

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Aug 26, 2005 9:57 pm

I haven’t posted here in awhile, but something came up that I can use
an experienced advisor’s advice.  I am  currently studying
for my CFA designation,  since I love the investment industry. I
don’t have any experience in investments, other than my personal
portfolio and a couple months of internshipsI have experience in sales,
but hadn’t planned on taking a sales job in investments. However, an
RIA just  made me an offer.

He is an independent broker for AIG financial advisors, and he recently
became a Registered Investment Advisor (RIA) with Fidelity. Now he
needs to move his clients over to managed money, that way he gets a
flat 1% a year. So he suggested that I take the Series 65, become an
RIA, and work with him. For all his clients that I can turn over to
managed money, he’s offering me 50 bps, and he takes 50 bps, and I
would be the one managing their money. And any new clients that I bring
in, I get 100% of the commission.

Does this sound like a good deal that I should snatch up? Or should I get more experience first? All comments welcome.

Aug 26, 2005 10:21 pm

Primo, I think I’d try to find out what the RIA stands to profit.  No offense, but to just up and turn clients over to a basically untried manager borders on being reckless.  On the face of it, doesn’t it stand to reason that he has everything to lose and little to gain?

Aug 26, 2005 10:26 pm

Well, he would be getting half of the commission. But this is also a
guy who has about 1500 clients. He has so many that he  can’t deal
with them all. So of  course he isn’t going to give me his big
clients, he’ll probably toss me the $10-30k accounts to start off.

Aug 26, 2005 10:33 pm

You might well be right, but I think I'd clear up the 'probably' first.

Just my $.02.

Aug 26, 2005 10:42 pm

No, he’ll definitely give me his smaller clients, Starka, and that’s
all I expect. I need to practice with the smaller fish to be able to
close the big fish!

So do you think I should take his deal?

Aug 26, 2005 10:44 pm

I see what you mean though, I should make certain that he’ll give me
his clients before I jump into anything, I’m just wondering if this
kind of offer is common.