The Path To Independence: BD vs RIA

  • Which Independent Route is Right for You?
  • Freedom & Flexibility vs Turnkey Solutions
  • Getting Started with Your Unique Move

Over the past few years, more and more advisors have made the big move and left their wirehouse opting to take their business to the independent side of the industry. The decision to break away is big enough by itself, but once made, there’s another critical decision advisors need to make – whether to partner up with a broker-dealer or go the RIA route.

While trends might sway year to year, there’s no right or wrong answer here; there’s no definitive good or bad side that clearly points to one path. Every advisor has their own unique set of needs, goals, and vision of their practice. The decision on whether or not to work with a broker-dealer will depend on what kind of structure the advisor is looking for — what’s best for them.

Why Go the Broker-Dealer Route?

The past few years have seen a rise in advisors going the RIA route. This has left broker-dealers needing to sweeten their offers to recruit and retain top-tier advisors. As a result, broker-dealers have become more open and flexible with many aspects of the business, such as working with multiple custodians. On top of that, signing with a broker-dealer often comes with a big upfront bonus. 3xEquity can help provide the guidance needed to make a better-informed decision. Interested to see how much you can get? Click here

Remember. it takes a lot of work to launch as a full RIA and it comes with a lot of costs related to practice management, product offerings, and technology. Going the broker-dealer route means you get access to turnkey technology and compliance solutions. Advisors also have a plethora of products and services to offer their clients, thus making working with a broker-dealer a great option for those looking for more variety and less responsibility in terms of paying for and building and maintaining the infrastructure. 

What About the RIA Path?

It should come as no surprise that going full RIA means you have 100% control over every aspect of your business — and 100% responsibility. You have the freedom and flexibility to do what you want and don’t have to worry about any type of constraints to hold you back from achieving your goals. The RIA side gives you the power to build the identity of your business and develop the practice as you see fit. No one knows your clients’ needs and goals like you do and having the ability to choose your tech stack, mixing and matching different solutions, can help to make sure your clients and your business have everything they need to succeed.

Another big reason for choosing the RIA route is the eventual payday you can get when it comes time to sell. You’ll own your book of business, giving it a much higher value and, not to mention, a much lower tax rate when the payday comes. And for those still far away from selling their business, being an RIA typically means easier regulatory supervision from the SEC in comparison to FINRA, which handles the regulation of broker-dealers.   

How do I get Started?

When the time comes to choose which path of independence you’re going to take, make sure you take a long look at what you want the structure of your business to be and where you want your business to go. There’s value to both working with a broker-dealer and being an RIA and it’s up to you to determine what you value the most — but we can help get the process going.

As you contemplate which road of independence to take, look to 3xEquity as your guiding hand. We’ll provide you with up-to-date data and answer any questions you may have. And if you choose to work with a broker-dealer, we’ll help you get multiple offers from the top firms in a matter of days.

Call 855-491-2910 to talk to a team member today.

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