Shouldn’t it be you and your clients?
With more and more advisors seeking out corporate RIAs, it’s essential to realize that not all of them are the same.
Some are ‘tuck-ins,’ which means once an advisor affiliates, they become an entrenched part of a firm’s existing ecosystem. Others adopt the ‘plug-in’ approach, where advisors can leverage a firm’s existing infrastructure and still maintain the flexibility that defines their independence.
Which type of corporate RIA is the best route for you, your staff and your clients? The answer depends on the level of control you wish to have over your business.
We began examining these issues as part of a collection of articles that first appeared this summer. The first was about who controls your client data, you or your firm? The other touched on who owns your investment management process.
Our third and final piece in this series strikes at the heart of the advisor/client relationship and has far-reaching implications for your success: Who controls your fees?
Negotiation of fees and compensation
Having the freedom to offer different fee structures for clients depending on their needs and circumstances can be a game-changer for independent advisors. Yet this is a non-starter for some firms, including many tuck-ins. They have one fee schedule, and advisors must follow it no matter what.
Yet it is reasonable to allow advisors the flexibility to set fees on a client-by-client basis. Plug-in models like Strategic Blueprint do that. Advisors can charge for asset management based on various factors, including the nature of their services, the client’s investable assets, the advisor’s time commitment and the complexity of the relationship.
Of course, the fees must be reasonable. But at the same time, there’s nothing wrong with a client compensating an advisor based on the true value they bring to the table.
Fees for other investment services
Advisors may offer a wide range of services beyond asset management, including financial planning, retirement planning and consulting. The fees associated with these services should also be negotiable, whether those fees are asset-based, a flat or hourly rate or subscription-based.
Flexible fee structures are mutually beneficial for both advisors and clients. Such an arrangement provides advisors with a path to offer new services, which is a great way to attract new business and retain existing relationships. Meanwhile, any time clients have access to more services – and have multiple options to pay for them – the greater the chances are that their needs are met, which is a good thing.
Flexibility for you, your business and your clients
Independent advisors are, well, independent. They don’t like being told how to run their businesses. Otherwise, they likely wouldn’t be in this slice of the financial services industry in the first place. So, the last thing an independent advisor needs is an overly rigid corporate RIA partner.
Strategic Blueprint’s approach gives advisors control over their clients’ data, lets them manage their assets using the best process and allows them to negotiate what and how clients pay for the services the advisor provides to them. We believe this overall approach represents the best of true independence.
Julie Sullivan is the President of Strategic Blueprint, an independent RIA with an affiliation model geared toward truly independent-minded advisors.
This article is part of WSR’s Sponsor Partner Content series.