Rookie Starting at an RIA vs. Wirehouse

or Register to post new content in the forum



  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Sep 6, 2006 2:15 pm

I would like to know what people think about a rookie career changer starting with an RIA like Renaissance Financial as compared to Morgan Stanley. I understand that the two organizations are not exactly peers. If I were to start a career at a place like Renaissance would it be limiting my long term career potential?

<?:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" /> 

I have read and been told that the industry is moving toward the RIA model. I think a start at a place like Renaissance would allow me to market to all of the wirehouse clients with a product they cannot get at a wirehouse; a complete financial plan. Is this a valid thought?

Sep 7, 2006 7:54 am

First, understand that the wirehouse will be offering something that the

RIA will not… a training program. While they will get you to pass the

necessary exams, and give you some training, it will pale in comparison

to the wirehouse.   The RIA model is really designed for people who have

been in the business, developed their book, and already gone in the

direction of fee-based advisory services.

I’m not sure what your role would be at the RIA, but if it’s an ‘eat what you

kill’ mentality and you aren’t being asked to become a part of a team,

then the RIA route can be daunting in terms of earning an acceptable

living long enough to survive.

The problem is this - If you join a wirehouse, and THEN decide within a

few years that you would like to join the RIA, it will be very difficult to

sever without some sort of legal action concerning the training costs and

potential non-compete that you’ll most likely have to agree to should you

leave to join a competitor. Also, in a situation like this, an RIA is a

standalone firm without the deep pockets and may insist that you hire

your own counsel and pay your own costs concerning the litigation.

You are right, the industry is moving to an RIA format, as most

wirehouses hold also an RIA within their firm. So, the wirehouse MAY be

your best option if you plan on surviving in this business for a long

period of time. I was happy that I had the wirehouse training before I

struck out on my own… I was trained there, and 13 years later I formed

my own RIA.   Wirehouse training was worth it.

I don’t think you would be limiting your long-term potential by starting at

the RIA - I DO think that you would be much slower out of the blocks in

terms of earnings, and I’m not sure that most new individuals to our

business have the ability to survive a slow start.

RIA’s and wirehouses offer pretty much the same stuff, including financial

plans. They [wirehouses] CAN charge for this, however, many times

market it as an ‘investment plan’ with future wealth simulations, and cash

flow analysis. Don’t be fooled that they are drastically different, when

they are all going for the same result; consulting to the client.

I am very much in favor of the RIA format - I’m just not sure that it’s the

right thing to do out of the blocks without a significant amount of proper


Good luck to you -


Sep 7, 2006 4:16 pm

Given that most of the industry training is product/compliance/licensing, and not something that actually teaches you how to do the job - don’t base your decision on whether or not you’ll be trained.  By the end of your first month - your ‘on the job’ training will surpass anything you’ll get from your friendly neighborhood wirehouse.