EDJ to RIA

How many assets did you bring over?

EDJ to RIA,

Very, very, very helpful info.  Thank you for all of it.

I am just unclear on two things:  So, you can't/don't get paid on stock/bond transactions, right?  Cause this would go through, say Fidelity, and you would just have limited POA, right?

Also, the VAs...can you/do you receive commission on these?  If so, how?  For instance, if you like the Protective Annuity, do you just have them open up the account directly with Protective and then protective sends you a commission?

Thanks again for your elaborate and informative posts.

EDJ to RIA,

Also, what consulting attorneys or compliance consultants did you use when setting up your RIA?  In all, how long would you say it took you from the point where you said, "I'm forming my RIA" until you were actually legally in business as an RIA?  Any more info you care to mention on the actual logistics of setting up the RIA is greatly appreciated.  I'm becoming more convinced each day that this is the route for me.  The only thing that scares me a bit is the compliance oversight issues...just begin to worry if this would not consume a lot of my time.

Thanks.

[quote=ManDate]

EDJ to RIA,

Also, what consulting attorneys or compliance consultants did you use when setting up your RIA?  In all, how long would you say it took you from the point where you said, "I'm forming my RIA" until you were actually legally in business as an RIA?  Any more info you care to mention on the actual logistics of setting up the RIA is greatly appreciated.  I'm becoming more convinced each day that this is the route for me.  The only thing that scares me a bit is the compliance oversight issues...just begin to worry if this would not consume a lot of my time.

Thanks.

Every time I see the screen name "ManDate" I have to surpress a Beavis and Butthead snicker....call me juvenlie....

Well Joe da, it appears you have the cultural literacy to jump in and put your stamp on 'most anything ... and you laugh at your own jokes.

( Sorry, couldn't resist takin' a jab at your apparent good old boy now ranting intellectual character).

[quote=tenthtee]

Every time I see the screen name “ManDate” I have to surpress a Beavis and Butthead snicker…call me juvenlie…

Well Joe da, it appears you have the cultural literacy to jump in and put your stamp on 'most anything ... and you laugh at your own jokes.

( Sorry, couldn't resist takin' a jab at your apparent good old boy now ranting intellectual character).

just bumping this topic up…would like tjc or EDJ to IRA to weigh in if possible.

Registration

marketcounsel.com - Attorney is Brian Hamburger - They can set up both the corporate documents, RIA documents, and hold your RIA in a 'quiet' manner until you resign.  Excellent firm.

We started the 15th of March, and were set to go by the end of 23rd of May.  We had an extraordinarily long SEC approval time period (they forgot to TELL us we were approved...).  This involved the SEC filing, LLC document creation, document and client agreement creation, etc.

Annuities - we use the Fidelity no-load annuity.  We 1035 the assets to the Fidelity annuity which has expenses of .75% annually.  Assessing a 1% advisory fee is the way we are compensated.  Total expenses are 1.75% vs. 2.5% on the normal annuity.  Annuity is held on the client statement.

Compliance issues - If you are a solo practice, outsource this.  Really... outsource this.  If you are a two, three person shop, you will be your own compliance officer, and you should still outsource this.  It's not the time-waster that you think it is.  It requires less time than I had thought.

Questions?

C

Im like an onion, man...many layers.......and hey...somebody has to laugh at the jokes!

I love the onion visual, inspired me to ask my boys about Beavis & Butthead, big hole in my cultural literacy. Maybe I'll just rent it and have a couple of martinis for lunch and watch it here on the big screen this afternoon. A lot easier than leaving my b/d and starting an RIA.

Excellent information Captain and thanks for it!!  This board is quite valuable.   One question in regards to Brian, the attorney you used...I know his fees could easily have changed, but do you recall a ballpark figure he charged to do the work setting you up?

Also, do I have to have Fidelity as my RIA custodian or can I just use their annuity in the same manner that you do, even if my custodian was, say, TD Ameritrade?

Btw... I will be a one-man-show at least to start with.  Who do you recommend for outsourcing the compliance to?

Thanks.

Fee Question

I remember the fee clearly... For us the fee was $15,000 in terms of total set up and everything.  I mean everything.  This number will change based on the number of people, and it should work out to be roughly $2,500 per person for set up and legal expenses.  I don't think his fees have changed that much within the past 9 months.

Annuity Question

If you have Fidelity as your RIA, you can use their annuity.  If you do NOT use them as your RIA custodian, I'm not sure if you can.  You will, however, be able to use the myriad of different RIA annuities which exist through a variety of different vendors.. Hartford, Pacific LIfe, blah, blah.....  There are many versions out there, and it clearly offers a choice on behalf of the advisor.  The only issue is being able to report the annuity position on the statement.  Fidelity can price and report on the annuity through their statement.  However, you need to check with TD, or Schwab to see whether or not they offer that capability. 

Compliance Question

There are a number of firms which outsource their compliance capabilities.  I have a bunch, but you might check out riaserve.com for starters.  They also have the ability to set up your RIA, and walk you through the process.  They do not, however, have the ability to create your LLC documents, and do not offer legal advice.  Excellent compliance people, however.

C

[quote=tenthtee]

Im like an onion, man…many layers…and hey…somebody has to laugh at the jokes!

I love the onion visual, inspired me to ask my boys about Beavis & Butthead, big hole in my cultural literacy. Maybe I'll just rent it and have a couple of martinis for lunch and watch it here on the big screen this afternoon. A lot easier than leaving my b/d and starting an RIA.

Joe is right, I get a fee for AUM, not from transactions. I do the same as Captain for annuities, either through Fidelity or Vanguard. However, since I’m not with Fidelity RIA, I have POA on the VA and just have to add an additional Excel spreadsheet with the quarterly performance report with the total of all assets.

How are you getting in front of the people you're selling on planning?

Cold calls?  Known personally?  etc.?

Ace

RIA here is another qu for you.  What if you were to become on RIA and you have a lot of C and L share annuities on the books.  WHat do you do with those?

Ace and Malcolm,

I get business from a number of places. I have some former Jones clients who transferred with me and I have a system to get referrals from them. I also do a monthly "workshop" to educate retirees and seniors about pitfalls and hiddend fees. I send out a couple thousand invites a month and usually get 10-30 attendees. I usually get about 70-80% in for an appointment.

I also have partnered with a local accounting firm to come in a couple of times a month at two different locations to do reviews for their clients. I don't charge for my time, but I also don't have to set up the appointments.

I also teach a class each spring and fall at our local community college and get a lot of appointments from that.

I think the one thing I've learned is there's no silver bullet with prospecting. I try to do a number of things that I enjoy and don't spend any time doing things I hate, like cold-calling. You just have to find out for yourself what you're good at and what you like. Also, I've learned that you can't do something one time and make a judgement about it. You need to commit to something for at least 6 months (I think) before you can write it off. Just my opinion...

Tommy

Sorry Malcolm, I forgot to answer your question.

I can hold C shares and other classes, but it doesn't make sense for the client. My custodian keeps all 12b-1 fees, so I'd have to charge my fee on top of that. I usually will just move someone into the A-share or go to no-loads or ETFs. As an RIA you get a "load-waiver" so you get A-share expenses without charging the front load.

Part of my story to clients is that I can save them money including my fees, so lots of time I'll show my fee, say .70%, plus the ETF fee of .09-.25% and that they're getting a good portfolio AND ongoing advice for less that their expense ratio before. Plus no up-front, no surrender, tax-efficient, blah, blah, blah. It seems to be pretty compelling. That's just the way I set up MY business...

If the’re annuities, I 1035 them into no-load annuities and charge my fee separately, like out of another mutual fund account. Or you can bill them directly.

Hey Captain,

I am having trouble finding these RIA annuities that you are referencing in your posts.  I found a RIA annuity at PacLife called the Odyssey but you need to be affiliated with a B/D to sell it.  I told them that doesn't makes sense but they say that's the way it is.

Are you familiar with any RIA annuities which offers living benefits that don't require a B/D affiliation?

Thanks for sharing your wisdom.

JC

JC -



That’s strange… I only work through Fidelity, but did check into your

question, and yes… it looks like you are right. I listened to the Pac Life

person and they said ‘we have an RIA product…’, and they went on with

their sales pitch. Now that I read their press release (I’ve given you the

web address below), it says that you have to be affiliated with a BD in

order to sell their product.



I think you are correct in saying ‘it doesn’t make sense’, but, their product

is clearly marketed to the Raymond James-types, who are providing RIA

services, with their reps existing as Registered Investment Advisory

Representitives rather than the full-on private RIAs who have NO

affiliation with a BD.



Sorry for the confusion, but I’ll check on this further. We’ve had so many

wholesalers on our office that don’t have a clue what the difference is

between the RIAR, RIA and independent BD relationships that exist within

our business.



I’ll be back next week with additional information. I’d like to know

myself.



Thanks,



C