Not every RIA is a perfect prospect for every RIA custodian. That type of mismatch was one of the hot topics this morning on a giant panel discussion where four recruiters grilled four custodians about the business.
| Brian Hamburger|
President, Chief Executive Officer
The "Diverging Values" panel, in the 2015 MarketCounsel Summit
at the Fontainebleau hotel in Miami Beach, included, on the custody side: Andy Kalbaugh
, managing director and divisional president of institution services at LPL
; Bob Oros
, executive vice president and head of the RIA segment at Fidelity Clearing & Custody
; Mark Tibergien
, CEO and managing director of Pershing Advisor Solutions
; and Bill Van Law
, president of the investment advisors division at Raymond James
. On the recruiter side, the questioners were: Mark Albers
, president and CEO of Albers & Associates Consulting
; Mindy Diamond
, president of Diamond Consultants
; Danny Sarch
, owner of Leitner Sarch Consultants
; and Ryan Shanks
, founder and CEO of Finetooth Consulting
Albers asked the four custody executives what would make them walk away from an RIA prospect? Kalbaugh and Van Law talked about the importance of RIAs having "shared values" with the custodian. Oros added that he looks at RIAs with teams that actually have a shared vision internally. And Tibergien mentioned concerns about breakaway brokers who may not know what they're getting into.
"We're vetting them to the point of understanding whether they're prepared to be independent business owners acting in a fiduciary capacity for their clients, whether they are committed to running their business professionally," Tibergien said.
For prospective breakaway brokers, Oros urged such FAs to avoid "jumping to a solution too quickly". Tibergien noted that, when it comes to such prospects, about a third end up creating their own firms, about a third join existing RIAs, and about a third remain in the captive broker environment.
"When people say 'I want to be an entrepreneur,' we realize that's a french word for 'not being held accountable,'" Tibergien said.
The panel even addressed roboadvisors. Van Law reiterated a promise he made at a Raymond James conference that the B-D and custodian will not be creating any direct-to-investor roboadvice solution. Kalbaugh and Oros both framed the roboadvice idea as something to integrate with human advice, not a separate solution.
One area of variation between the different custodians from an RIA's perspective is in international business. Tibergien noted that Pershing welcomes advisors with such business. Kalbaugh and Oros both contrasted by saying that, while they have the capability to support such business, they probably wouldn't be the right home for an RIA that focuses almost exclusively on international business.
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