Why Is It Harder To Pick An RIA To Join Than A Broker-Dealer To Join?

I'm Brad Wales with Transition To RIA (TransitionToRIA.com). This is episode #95 of my question and answer series where I answer RIA related questions I get from advisors just like you.
You don’t choose which car to buy based on which dealership brand happens to be closest to where you live.
You don’t choose which house to buy based on which listing you happen to see first on Zillow.
The tail should never wag the dog.
Important decisions should be made based on the underlying variables, not based on which decision is logistically easier to make.
The same thing applies when picking what type of firm to transition your practice to.
In this episode, I explain why choosing a broker-dealer is always easier than choosing an RIA, but if you let the tail wag the dog, you get what you pay for.
What I do: At Transition To RIA I help financial advisors understand everything there is to know about WHY and HOW to transition their practice to the Registered Investment Advisor (RIA) model.
RESOURCES & LINKS
___________________________________________
🔹 Website: TransitionToRI...
🔹 Show notes: TransitionToRI...
🔹 Contact me: transitiontori...
🔹 List of all questions I've answered: transitiontori...
🔹 Podcast: transitiontori...
🔹 Whitepaper ("11 Ways The Economics Of The RIA Model Are Superior To Other Advisor Affiliation Options"): transitiontori...
🔹 Transcription of video:
Why is it harder to pick an RIA to join than a broker-dealer to join? That is today's question on the Transition To RIA question and answer series. It is episode #95.
Hi, I'm Brad Wales from Transition to RIA where I help you understand everything there is to know about why and how to transition to the RIA model.
If you're not already there, head to TransitionToRIA.com where you’ll find all the resources I make available from this entire series in video format, podcast format. I have articles, I have whitepapers. All kinds of things to help you better understand the RIA model.
Again, TransitionToRIA.com.
On today's episode, we're going to talk about if you are inclined to leave your firm and join another firm - I’ve done several episodes on whether you should start your own RIA or join an RIA - why does it tend to be harder to pick an RIA to join versus a broker dealer to join?
Now, harder does not necessarily mean that the result is not better, as you'll see as we go through this. But the due diligence process of joining an RIA can often be harder.
What prompted me to make this episode is I was talking to an advisor who had recently been speaking with some sort of industry recruiter. In that conversation, the industry recruiter mentioned that the last 100 or so advisors that they extracted or pulled out of a broker dealer, the overwhelming majority of those advisors, with that recruiter's help, went to another broker-dealer, not the RIA model.
I guess the recruiter was implying that that was the superior path. I think there's a couple of variables in play that are skewing those results for the recruiter. One of those, and it’s what got me now doing this episode, is part of the challenge of evaluating RIAs to join or broker-dealers to join is that it is more complicated to understand the options in the RIA model than the broker-dealer model.
So, my guess is, in part, the reason this recruiter was experiencing those results is because they themselves are either not as experienced with, or not as comfortable discussing, the RIA model versus the broker/dealer model. So hence, guess what option they explain most to the advisors they're talking to?
Likewise, if most of their conversations are about broker-dealers, and they end up helping those advisors make a move, guess where most of the advisors end up?
So that conversation prompted me to make this episode, to explain how understanding RIA options is different than broker/dealer options. And how you want to be careful who you are getting your information from because there could be a bias towards what someone knows better or is more comfortable talking about it.
Now, maybe a particular path they're telling you about is ultimately best for you, but make sure it's not because they're not familiar with how other pathways might work.
I spent many years working at the corporate level of a multi-channel firm. They have an employee model, an independent broker-dealer model, an RIA custodial channel model.
I saw all this firsthand. Not just the different channels, but how they operate, how they differentiate, who their competitors are, how they position themselves against competitors. Con't.....
View remainder of transcription here: TransitionToRI...
Disclaimer: transitiontori...

[@jmurph20]

Love this! Great information as a college student seeking this career path. Thank you!

[@TransitionToRIA]

Thank you, I appreciate the kind words. I'm glad you found the video helpful.