By Cory Roberson, Principal at FIN Compliance and FIN Lancer
Considering opening an RIA Business for the new year?
Advisors may conduct business
with a combination of the services listed below.
#1 - RIA Firm + Portfolio Management
#2 - RIA Firm + Financial Planning + Insurance
#3 - RIA Firm + Portfolio Management + Financial Planning/Consulting + Third Party Consulting
#4 - RIA Firm + Portfolio Management + Financial Planning/Consulting +
Registered Rep/broker-dealer
#5 - RIA Firm + Portfolio Management + Private Fund
#6 - RIA Firm + Portfolio Management + Mutual Fund
#1 - RIA Firm + Portfolio Management
Firm Level
|
Rep Level
|
Services
|
Registered Investment Advisor
|
Investment Advisor Representative
|
Portfolio Management
|
#2 - RIA Firm + Financial Planning + Insurance
Firm Level
|
Rep Level
|
Services
|
Registered Investment Advisor
|
Investment Advisor Representative
|
Financial
Planning
Insurance |
#3 - RIA Firm + Portfolio Management + Financial Planning/Consulting + Third Party Consulting
Firm Level
|
Rep Level
|
Services
|
Registered Investment Advisor
|
Investment Advisor Representative
|
Portfolio Management
Financial Planning/Consulting
Third-Party/Assets Under Advisement
|
#4 - RIA Firm + Portfolio Management + Financial Planning/Consulting +
Registered Rep/broker-dealer
Firm Level
|
Rep Level
|
Services
|
Registered Investment Advisor
|
Investment Advisor Representative
Registered Representative
|
Portfolio Management
Financial Planning/Consulting
Securities products/Broker-Dealer
|
#5 - RIA Firm + Portfolio Management + Private Fund
Firm Level
|
Rep Level
|
Services
|
Registered Investment Advisor
|
Investment Advisor Representative
Securities Agent (some states required if issuing
securities/PPM’s)
|
Portfolio Management
Private Fund
|
#6 - RIA Firm + Portfolio Management + Mutual Fund
Firm Level
|
Rep Level
|
Services
|
Registered Investment Advisor
|
Investment Advisor Representative
|
Portfolio Management
Mutual Fund
|
Overview of Services*
Portfolio Management** typically involves investment supervisory services
(e.g. directing portfolio investments, holding assets under management). These can also include: Robo-Advisory and
retirement planning management services.
Third-Party Portfolio management (“Assets under advisement”) is a form portfolio management
service. This service is usually structured
in a consulting, flat or shared fee arrangement with another investment firm,
fund, insurance company, and/or retirement plan provider.
Financial Planning/Consulting typically involves hourly planning and/or
investment consulting packages for clients (e.g. life, career, financial,
college, emergency planning). This service can include plans for retail clients,
retirement planning for a pension plan or third party services for a retirement
plan provider.
Registered Reps/Commissions typically offer securities products for a
commission through a FINRA or other SRO-registered entity. This means that the
advisor is in a commission relationship with an affiliated or non-affiliated
broker-dealer/securities issuer.
Mutual Funds
(“investment companies”) involves regulated investment vehicles sold to the general
public (open or closed end funds).
Private Funds involves
investment (“pooled”) vehicles that are sold to either accredited or
sophisticated investors (Reg. D). These funds
typically rely on two Investment Company Act fund exemptions, 3(C)–1 or 3(C)–7 to avoid the same reporting burdens as mutual
funds. Investments can include: real estate, stocks, venture capital, blockchain, and cryptocurrency.
**Sample Quarterly Fee billing schedule (portfolio management/supervisory services)
**Sample Quarterly Fee billing schedule (portfolio management/supervisory services)
Market Value ($)
|
Quarterly Calculation of
Fees
|
Annual Fee Schedule (%)
|
Total Fees
|
1,500,000
|
$250,000 X .004875
|
1.95
|
$1218.75
|
$250,000 * .0035
|
1.40
|
$875
|
|
$500,000 X .0025
|
1.00
|
$1250
|
|
$500,000 X .00175
|
.70
|
$875
|
Compliance Reporting Maps
Based on your firm’s model, we encourage firms to create their own
reporting map for compliance purposes. We
believe that the process of breaking down reporting levels can make your firm’s
ongoing compliance requirements* a lot easier to bear.
Reporting
requirements are based on your firm’s model. These can include: ADV’s, U-4, Corporate documents, subscription
documents, Edgar filings, stress testing (e.g. SAS 70), and/or audited
financial statements.
Below, we’ve created a sample reporting map breakdown.
Corporate
Level
|
Firm
Level
|
Rep
Level
|
Securities
Level
|
Fund
Level
|
Corporate
Documents
LLC/C-Corp
Securities
|
Registered
investment Advisor (RIA)
|
Investment
Advisor Representative (IAR)
Registered
Representative (Hybrids)
|
Securities
issuer/agent
Initial
Public Offering
Initial
coin Offering
Private
Placements
|
Registered
Fund (i.e. open/closed end funds
Private
Fund (registration or exemption)
|
Email us at: cory@riareview.com or call us at: 650-305-2688 if you’d like to evaluate your business reporting model or start an RIA.
Compliance and Business Management
FIN Compliance (FINCompliance.io) is a
consortium of compliance services including: RIA Consults-Roberson Consults
Group, a compliance consulting firm, RIA Review, a compliance-management
software tool (SaaS), B-D Review, a RIA/Broker-Dealer compliance management
software tool, and FINLancer is a business
management portal featuring: E-signature tools; Invoicing integration,
Vendor Directory, continuity directory*, business client document portal, and
more (available by Q3 2019). Access all services
on one site: FINCompliance.io.
Impact
FIN Missions (FINmissions.com) provides business support group
sessions for other entrepreneurs. In addition, Cory has volunteered
for more than fifteen youth programs in locations such as like S. Korea, China,
S. Africa, Thailand, and India.
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