This is a sales job.  Salaries are for people who can't live off the work of their hands (ie: comissions)

You emphasize salary, and that means you don't believe in yourself.

A trainee should not expect more than $40k their first year in salary.

[quote=maybeeeeeeee]

A trainee should not expect more than $40k their first year in salary.

[/quote]

I know lots of people who get much more than that.  I know a guy who was given a red ink draw of $10,000 per month for two years because he made a compelling case for why that was necessary and why he was worth it.

No trainee will EVER get 10 k a month for 2 yrs! That was the original question wasnt it?

I started at an RIA and my salary was $50K/annum + 25% bonus.

[quote=tentative]I started at an RIA and my salary was $50K/annum + 25% bonus.[/quote]

Thanks for the input.  Pardon my ignorance, but isn't every FA an RIA?  I'm new to this game.

Opie -



No - every FA generally is considered to be a registered representative of

a broker-dealer firm. You may use the word ‘Advisor’ in many senses of

the position, but a ‘registered investment advisor’ is not the same.



An advisor who STARTS their own firm, generally will start the firm as a

Registered Investment Advisor (RIA) and is regulated by the SEC, and not

the NASD (which regulates broker-dealer firms, which in turn also

regulate registered reps).



So, to directly answer you question… No, FA’s are not RIA’s.



Individuals who work at an RIA firm = investment Advisory

Representatives



Individuals who work at a broker/dealer = Registered Representatives.



An RIA firm would be akin to a fee-only investment advisor (like Mom and

Pop Investment Advisors LLC)



A broker/dealer firm would be, generally, a firm which offers a fee or

commission-based relationship. (i.e. Merrill Lynch)



C

Thanks Captain - good info.

Is there a list out there of RIAs?  For instance, is Raymond James considered an RIA?

RIA's offer advice as their product.  B/D's sell products and give advice relating to those products.

There is a fine line between an RIA and a B/D.  An RIA is held to a fiduciary standard a b/d is not.  So many firms that sell stuff do not want to be held to a fidiciary standard because alot of what they sell is junk.

The problem I see with the RIA business is alot of investors are fee conscious and 1% on 1 mil.. is 10,000 a year...  easy come easy go. 

The best place to find a list of RIA's is to check out the FPA or NAPFA most of these advisors are CFP's or CHfc, CLU's

[quote=bankrep1]

RIA's offer advice as their product.  B/D's sell products and give advice relating to those products.

There is a fine line between an RIA and a B/D.  An RIA is held to a fiduciary standard a b/d is not.  So many firms that sell stuff do not want to be held to a fidiciary standard because alot of what they sell is junk.

The problem I see with the RIA business is alot of investors are fee conscious and 1% on 1 mil.. is 10,000 a year...  easy come easy go. 

The best place to find a list of RIA's is to check out the FPA or NAPFA most of these advisors are CFP's or CHfc, CLU's

[/quote]

The misinformation, and outright stupid comments, in that are awe inspiring.

Anybody reading this should immediately forget what this fool is saying.

You can get a list of RIA’s by using the SEC’s website. The site address is

follows:



http://www.adviserinfo.sec.gov/IAPD/Content/

Search/iapd_OrgSearch.aspx



In response to a few comments made above. There are several large

firms that are held to both standards and ARE considered fiduciaries. I’ve

seen it at my old BD firm (large wirehouse) and can assure you that large

firms which are both RIA’s and BD’s are held to a dual standard. For

those advisors who are acting as fee-based advisors for a fee-based

client, the standard of care is elevated in terms of whether or not you are

considered to be a fiduciary. I’ve seen the ‘checklist’ from my former

firm, and yes, you are a fiduciary… straight up.



I agree… investors are fee conscious, however, the fees on investment

products (i.e. funds and annuities) can be drastically lower within a RIA

platform than any type of wirehouse’s bundled fee-based solution. That

being the case, I’m certain that the operational efficiencies and lower-

expense funds offered through an RIA platform can mitigate many of the

objections that larger investors may (I really mean ‘may’…) have for

advisers charging 1% on millions under management.



I’ve used the Davis funds for years. When I did the RIA thing, I found out

that they wouldn’t even touch a portfolio (managed portfolio, that is…)

without charging 1% as a base fee with a $10 million minimum. Takes

balls, but if you have a good service, it’s worth 1% on virtually most

portfolios (until you get to $20 million perhaps.



While I’m not sayng that BD firms which offer RIA services are for sh*t, I

will say that the ‘pay for play’ arrogance is getting a bit old.



C

As for whether or not Raymond James is an RIA…



If they offer a ‘fee for advice’ program, then yes, they are also dually

registered as an RIA.



There are two types of programs, which are fee-based, that exist…



1.) Fee for advice - Those allow the advisor to charge for advice ONLY.

2.) Fee in lieu of commissions - Those allow for the firm to charge an

asset-based fee in lieu of charging commissions.



To address #1 - A fee for advice program will HAVE to adhere to a

fiduciary standard. I believe those types of firms are still regulated by the

NASD (this is hotly debated right now…). The firms will then be a sponsor

of a ‘wrap-fee’ program, allowing for the advice and trading costs to be

bundled within one, simple, asset-based fee. They are 99% of the time

non-discretionary investment programs where the client STILL needs to

give the ultimate ‘yes’ or ‘no’ answer to each and every trade you effect

within their account.



To address #2 - A fee in lieu of commission account (which many firms

are getting rid of, by the way…) is a program which allows the client to

maintain a certain amount of expense, while having a seemingly

unlimited amount of trading (there are restrictions on the amount,

generally). The problem here was that advisors were charging a fee, and

there were no trades being done. In many instances, clients within a fee

in lieu of commission account were overcharged for the level of activity.

This caused most firms to question the programs and to initiate a ‘fee for

advice’ program which wasn’t dependent on the level of trading activity.

Fee for ADVICE is dependent on providing the advice, due dilligence and

communication to the client (those, instead of ‘trades’ were the

deliverables for clients within those programs).



The only firm which may not be registered dually as an RIA would be

Edward Jones. I’m thinking that you will find that MOST firms will offer a

fee for advice program which WILL render them as RIA’s in addition to

Broker Dealers.



It’s a convoluted issue, but the distinction is clear.



I’ve recently founded my own RIA, and have worked at a wirehouse also.

I’ve researched this for years, and feel that I’ve got all the information

covered.



I will say that forming your own firm and keeping 100% of the fees billed

is a rather good way to go.



C.

[quote=Big Easy Flood][quote=bankrep1]

RIA's offer advice as their product.  B/D's sell products and give advice relating to those products.

There is a fine line between an RIA and a B/D.  An RIA is held to a fiduciary standard a b/d is not.  So many firms that sell stuff do not want to be held to a fidiciary standard because alot of what they sell is junk.

The problem I see with the RIA business is alot of investors are fee conscious and 1% on 1 mil.. is 10,000 a year...  easy come easy go. 

The best place to find a list of RIA's is to check out the FPA or NAPFA most of these advisors are CFP's or CHfc, CLU's

[/quote]

The misinformation, and outright stupid comments, in that are awe inspiring.

Anybody reading this should immediately forget what this fool is saying.

[/quote]

BEF,

What specifically do you think is misinformation? 

[quote=Captain]



An RIA firm would be akin to a fee-only investment advisor (like Mom and

Pop Investment Advisors LLC)



A broker/dealer firm would be, generally, a firm which offers a fee or

commission-based relationship. (i.e. Merrill Lynch)



C[/quote]



Merrill is considered both.

[quote=bankrep1][quote=Big Easy Flood][quote=bankrep1]

RIA's offer advice as their product.  B/D's sell products and give advice relating to those products.

There is a fine line between an RIA and a B/D.  An RIA is held to a fiduciary standard a b/d is not.  So many firms that sell stuff do not want to be held to a fidiciary standard because alot of what they sell is junk.

The problem I see with the RIA business is alot of investors are fee conscious and 1% on 1 mil.. is 10,000 a year...  easy come easy go. 

The best place to find a list of RIA's is to check out the FPA or NAPFA most of these advisors are CFP's or CHfc, CLU's

[/quote]

The misinformation, and outright stupid comments, in that are awe inspiring.

Anybody reading this should immediately forget what this fool is saying.

[/quote]

BEF,

What specifically do you think is misinformation? 

[/quote]

Everything.  Nothing you said is factual, and some of it is downright stupid.

Where in the world did you come up with the idea that a broker/dealer does not have fiduciary responsibility--and that they like it that way so they can sell junk?

That is awe inspiringly stupid--and indicates that you don't have the most basic idea about this industry and how it works.

Let somebody who knows what they're talking about weigh in on this RIA discussion.

A registered investment advisor is more commonly called a "money manager."  They do not sell advice, they manage money.

What several of the "experts" on this forum are describing is a "Fee Only Finanical Planner."  People who will, for a flat fee, advise a client what to do with their money--but will not actually sell the various things to them.  They do not require licensing because they don't sell, and they are very unregulated because the NASD has no reach since they don't sell.

Basically if you want to be a fee only advisor all you need to do is open an office an run an ad in the yellow page.  Organizations like The Financial Planning Association have designations and things such as "The Registry" which are lists of people who have met various qualifications--but none of them are mandated so an individual may or may not end up with somebody who knows anything at all.

This is not the world of brokerage firms, insurance companies and financial planners such as the many "indy" firms that are out there.

Let's go there, let's go to Merrill.

There is a concept called "wrap accounts" which is the idea of allowing a single firm--say Merrill--to manage all your assets for an annual fee which is a percentage of the assets being managed.

When that arrangement is entered into Merrill will be acting as a Registered Investment Advisor.  Somebody in New York, or other regional offices, will be your teammate and they will call the shots for your client.  You will be expected to act as a buffer between the client and the individual RIA in New York.

There are also independent RIAs out there--lots of them.  They work out of very fancy offices in cities and towns all over the country.  Their goal is to attract the pension fund market as a client.  They will earn a percentage--less than 1%--of what they manage for the pension funds and other types of institutional investors.

They have salespeople who go out and call on the target markets.  They also attempt to arrange relationships with independent financial planner types.  They may be called something like Smith and Wesson and operate out of the nicest office tower in town.

Enter Series 65 or Series 66.  These are two relatively new--say 15 years now--exams that are designed for the major purpose of getting testing fees for an organization known as the North American State Securities Administrators Association or NASSAA.

These are the fifty state securites commissioners who regulate the RIA business.  Depending on how many clients the RIA has, and how much money they actually manage, they may be too small for the SEC to be concerned with--but somebody has to be concerned with them so the states are.  A lot of this is what Series 65 and 66 is all about--learning when the SEC is involved and when the states are involved and stuff like that.

Anyway, in order to enroll a client in a wrap account--or any of the other arrangements where there is an RIA in the mix--you must qualify as an IAR or Investment Advisor Representative.  You do that by passing Series 65 or 66.

What is Series 63?  First, it's an old test.  Been around for decades.  It is the exam that allows you to be "legal" in a state.  Years ago each state that required a test--not all do, Florida for eample--had its own test and you might find yourself being tested twenty, thirty or more times.  Some of the tests were easy, others were tricky, others were damn hard.  Utah required you to take the test in Utah, so if you were a broker in Boston but had a client in Utah you had to get on a plane and go to Utah to take a silly test.

Texas asked "What is the county seat of Bexar County?"  Stuff like that.

That was all "cured" by Series 63 which came along in the mid 1970s.

These days what most rookies do is take a Series 6 and 65 or a Series 8 and Series 65 or 66.  The Series 63 is covered by passing a Series 65 or 66 in the sense that paper covers rock, and is rarely suggested by firms who are not trying to get  you registered as soon as possible because you're actually nothing more that the latest body to come through their revolving door.

Let's get back to RIAs. They are not broker/dealers, although the big broker dealers all have an RIA division.  Legally they are completely separate organizations.  Merrill Lynch is a holding company that owns Merrill Lynch the brokerage firm, but it also owns one or more RIAs, a clearing firm and lots of investment banking firms that operate as separate entities.

It will be suggested that your clients at least consider the pros and cons of paying a one time annual fee to have their money managed by an RIA.  In return there will be no other charges for the account for the year.

The argument against it is that for an awful lot of people the annual fee is more than they would pay for the various charges because they don't really incur that many charges.

It's not unlike a restaurant that has a fixed price dinner.  For $40 you get an appetizer, salad, soup, entree and desert.  That's a good deal if you want all those things--but what if all you want is a salad and entree?

You can find such arrangements in the transaction oriented area as well.  There are firms that will allow you to make an unlimited number of trade for an annual fee equal to, say, 3% of the value of your account.

If you have $200,000 with that firm you're going to pay them $6,000 per year for the privilege of making all the trades you care to make.  Well, you can buy a hell of a lot of trades at $5 apiece for $6,000--not to mention the fact that doing a lot of trading is never a good idea unless you have the time to devote to watching what's going on almost all the time.

Speaking of that, Google is open.

i could have typed that entire piece like this with no punctuation of any sort and no capitalized letters but why in the world would i want to make the reader think i didnt know any better you never get a second chance to make a first impression

As often happens my phone was ringing so I sent that without proofing it.

The reference to Series 8 should be Series 7.  There used to be a Series 8 but there isn't any longer.

My bad.

Just a casual glance at the above post reveals that it is at the least, inaccurate.

For example, one is NOT required to hold a Series 65 or Series 66 to be designated an Investment Advisor Representative (IAR).

As usual, Put Trader is wrong.

Google is steady, but the July contracts are down on both sides.

This often happens on the Monday after an expiration when the stock is not banging around.

Patience is the key, they're willing to pay $74 and change for the combination.  Let's see I want to do ten within a few days, I'll do three right now and see if I can't get $75 1/2 for five more later in the day and then try to get $77 for the ther two later in the week.

Anything worth having is worth waiting for.

[quote=Starka]

Just a casual glance at the above post reveals that it is at the least, inaccurate.

For example, one is NOT required to hold a Series 65 or Series 66 to be designated an Investment Advisor Representative (IAR).

As usual, Put Trader is wrong.

[/quote]

A statement such as that, without any supporting comment, is nothing but a brain fart.