Breaking Away: Your Guide to Becoming an RIA

More and more Advisors are choosing to go independent. In 2023, the number of SEC Registered Investment Advisors (RIAs) reached over 15,000[1]. The market share also continues to grow. From 2020 to 2025 it’s projected to increase by 2.4% for independent and hybrid RIAs.[2]

Why are more and more Advisors working at wirehouses and Broker-Dealers making the switch to break away and become RIAs? How difficult is it to go independent? And what are the benefits of working independently versus becoming a hybrid RIA?

Why Become an RIA?

The advantages to going independent include autonomy, flexibility, higher earnings, and the ability to focus on the client experience. Without firm restrictions, RIAs can act quickly and tailor strategies to meet clients’ individual needs.

Being able to provide more personalized service is paramount to Advisors—it’s cited as a leading motivator for 98% to break away.[3]

The RIA Checklist

Preparing to go independent is a process. Before jumping, consider these critical steps:

1. Set Up Your Business

Becoming an independent Advisor is similar to launching any type of new business (except with more regulation). You’ll need to create a business plan outlining your services and strategy, including:

• Your target market – retirees, business owners, high-net-worth individuals?
• The services you’ll offer – investment management, financial planning, tax planning, estate planning, retirement planning?
• Your revenue model – flat fees, hourly rates, or a percentage of assets?
• How you’ll market –referrals, digital marketing, networking?

You also need to establish the necessary infrastructure to manage client accounts, investments, compliance, and operations, including setting up systems for billing, trading, monitoring, performance reporting, and ensuring regulatory adherence.

You can choose to oversee these yourself or outsource to a Turnkey Asset Management Provider (TAMP), which can help streamline the process.

2. Meet Compliance Requirements

Nearly half (44%) of Advisors say they don’t want to spend time on compliance tasks.[4] However, complying with legal requirements is necessary to ensure adherence to regulatory standards set by the Securities and Exchange Commission (SEC) or state regulators, including:

• Creating and implementing written policies and procedures
• Conducting annual compliance reviews
• Filing Form ADV
• Ensuring you’re prepared for periodic audits

RIAs must also comply with fiduciary duties and anti-money laundering (AML) regulations and ensure proper client disclosures regarding fees and conflicts of interest.

The complexity of these regulations can be overwhelming, especially for new firms without a dedicated compliance team. Partnering with a TAMP like the Symmetry Axiom Wealth Platform can help alleviate many of these challenges and mitigate compliance risks by providing access to intuitive portfolio management tools, reporting systems, and model portfolios that meet regulatory standards.

Axiom provides a seamless solution with technology and support to ensure a smooth setup, minimize client disruption, and maintain compliance.

3. Choose a Custodian

Choosing the right custodian is critical for safeguarding assets, executing trades, and providing account reporting. Some important considerations include cost, access, efficiency, and user experience.

The custodian you choose should align with your operational needs, support a range of investment options, offer competitive pricing, and provide a reliable platform for client transactions. Your custodian also must meet regulatory requirements and be registered with the SEC or relevant state authorities.

A TAMP can simplify this process by offering a streamlined solution. Axiom has established relationships with Fidelity or Schwab and can help guide you in selecting the most suitable custodian based on your specific needs. Our partnerships enable you to focus more on investment management and client relationships while we manage the complexities of custodian integration.

4. Embrace Technology

Technology—coordinating, choosing, managing, and paying for it—can be overwhelming and time-consuming for RIAs. Firms generally use close to seven different technology solutions.[5] And only one in 10 Advisors say their firm has all the technology solutions they need.[6]

Axiom integrates robust technology platforms to streamline essential back-office tasks for RIAs. The technology stack powering the solution includes:

• Axiom – a comprehensive central hub, including a Service Center, where you can quickly access information and tools to help manage client engagements

• Redtail – a cloud-based Customer Relationship Management (CRM) platform designed to help you manage client relationships, track interactions, and streamline workflows to enhance client service and business efficiency

• Orion Planning – easy-to-navigate workflows and customizable, client-ready reports using the latest behavioral finance research to help you deliver personalized planning experiences

• Orion Risk Intelligence – customizable next-level business intelligence, including risk analytics and economic research to help you develop investment strategies aligned to your clients’ needs

5. Transition Clients

Retaining clients ranks high on Advisors’ list when they consider going independent. In fact, 68% cite client retention as one of the most likely steps they’ll take in becoming an RIA when they get started on the process—and they expect to retain about 85% of their clients in the transition.[7]

With careful planning and clear communication, transitioning existing clients can be a seamless process. The key is establishing trust by:

• Setting clear expectations and ensuring clients feel supported during the transition
• Communicating the reasons why you’re going independent
• Highlighting the advantages of your new approach
• Reassuring clients that their financial goals will remain your primary focus
• Directing clients to your new contact information (email, website, etc.)

Partnering with a TAMP like Axiom can help ease clients’ transition. Axiom provides infrastructure and technology to help you efficiently manage client portfolios and offers access to a range of investment strategies and models.

With Axiom, you can quickly integrate client portfolios into an optimized platform with minimal disruption. This way, you can focus on building client relationships and providing financial advice, while the solution handles the complex back-office functions.

You Don’t Have to Go It Alone

Whether you decide to work independently or partner with a firm like Symmetry, it’s important to consider the pros and cons.

Working independently can be challenging because there’s more responsibility—and you’re in charge of everything. Plus, there are upfront (and ongoing) costs for marketing, licensing, and compliance.

However, with these challenges comes the benefits of flexibility, potential higher earnings, and freedom to make decisions about your business, services, and fee structure.

With a partnership, you maintain autonomy and flexibility—and you gain support. Namely through access to resources like marketing, technology, and compliance. With this type of arrangement, you also have the benefit of brand recognition, which can help attract clients, and you may gain access to an established client base.

Empowering the Independent Advisor

Breaking away and becoming an independent advisor comes with challenges—and opportunities. With guidance and support of a TAMP, you can streamline operations, gain access to sophisticated tools and resources to scale your business more efficiently, and focus on growing your client base and delivering exceptional client service.

As an RIA, your independence is essential. The Symmetry Axiom Wealth Platform empowers you to remain independent with the assurance that your client base remains yours. Plus, as your business expands, Axiom can scale alongside you.

Interested in learning more about becoming a Registered Independent Advisor? Our Regional Team can help. Connect with us to set up a discovery call. Want to learn more about our TAMP solution? Schedule a demo to find out how Axiom can help enhance your business.

For Financial Professional Use Only. Symmetry Partners, LLC is an investment advisory firm registered with the Securities and Exchange Commission (SEC). The firm only transacts business in states where it is properly registered or excluded or exempted from registration requirements. Registration with the SEC or any state securities authority does not imply a certain level of skill or training. No one should assume that future performance of any specific investment, investment strategy, product or non-investment-related content made reference to directly or indirectly in this material will be profitable. All data is from sources believed to be reliable but cannot be guaranteed or warranted.

 Symmetry provides this communication on this site as a matter of general information. Information contained herein, including data or statistics quoted, is from sources believed to be reliable but cannot be guaranteed or warranted. Due to various factors, including changing market conditions and/or applicable laws, the content may not be reflective of current opinions or positions. All content on this site is for educational purposes and should not be considered investment advice, recommendation, or offer of any security for sale.

[1] Investment Adviser Industry Snapshot 2024, Investment Adviser Association, https://www.investmentadviser.org/wp-content/uploads/2024/06/Snapshot2024_FINAL.pdf

[2] The Cerulli Report, U.S. Advisor Metrics 2021: Client Acquisition in the Digital Age, Exhibit 2.14, Cerulli Associates, 2021.

[3] Schwab Advisor Services Supported Independence Study, Charles Schwab, 2024, https://content.schwab.com/web/retail/public/about-schwab/schwab-supported-ind\ependence-report-2024.pdf

[4] Advisor WealthTech Survey, Orion, March 2024

[5] The 2023 Fidelity RIA Benchmarking Study, Fidelity Investments

[6] Advisor WealthTech Survey, Orion, March 2024

[7] Schwab Advisor Services Supported Independence Study, Charles Schwab, 2024, https://content.schwab.com/web/retail/public/about-schwab/schwab-supported-independence-report-2024.pdf