Comments on: A Bumpy Ride http://www.roadtoindependenceblog.com/2007/03/30/a-bumpy-ride/ Wed, 28 Jul 2010 15:37:53 +0000 http://wordpress.org/?v=2.9.2 hourly 1 By: John Napolitano http://www.roadtoindependenceblog.com/2007/03/30/a-bumpy-ride/comment-page-1/#comment-159 John Napolitano Tue, 17 Jul 2007 21:00:51 +0000 ia-wordup-7607#comment-159 Do not listen to John Napolitano he is only leading you into working with his company that has low payouts and a lot of promises. Do not listen to John Napolitano he is only leading you into working with his company that has low payouts and a lot of promises.

]]> By: JOHN NAPOLITANO http://www.roadtoindependenceblog.com/2007/03/30/a-bumpy-ride/comment-page-1/#comment-158 JOHN NAPOLITANO Tue, 17 Apr 2007 17:01:11 +0000 ia-wordup-7607#comment-158 Regardless of which road you choose it will not be easy. Switching Broker Dealers or custody of clients' fee based assets under management involves client signatures and learning new systems. And your former BD or custodian may do whatever they can to delay the transfers out. Maintaining a securities license seems to be a sensible plan to start out. Even though you may end up as an RIA only, there are probably clients who hold investment assets with 12B-1s or trailing commissions, or who are simply not ready to pay a fee for management. I believe it is a good idea to go forward and start your own RIA. It is you that you want to brand, not your new BD. They should also allow you to choose any respectable custodian such as TD Ameritrade, Fidelity or Schwab. Most BDs will also want a share of the RIA fees that you generate. The real question about having a BD in your pocket is, what are they doing to earn their fee? In our indepndent BD, we offer a tremendous amount of service way above the typical answer that a BD gives you... supoervision. We offer a full time CFA for portfolio design and management, we do the daily reconciliations, research, model building, re-balancing, trading, quarterly performance reporting and of course, compliance. We allow the advisor and client alike to access the reporting system on line and prepare ad hoc performance reports any time, and for any time frame that they wish. We will also do the analysis of a clients existing holdings, issue a report and then build a recommended portfolio based upon the RTQ and other client input. We also generate the IPS. Most professional advisors should not mind paying the BD something for as much service as this! I feel the same way about financial planning. Many BDs do not take a share of your FP fees because they wouldn't know how to do a financial plan if it were for themselves! The preparation of a plan should be with quality control and a formal review, just like an accounting firm would have a tax return or financial statement reveiwed before it is sent out. We thoroughly review financial plans and send the advisor back a list (sometimes quite long) of review points, questions and other issues to consider. These must be addressed, cleared or changed... then the plan is ready for client submission. Plans should not be biolerplate output from financial profiles or some other program... they should be customized documents written in easy to understand language, with backup or projections as needed. Good luck with your transition. I look forward to following it. Call if you want guidance. 781 849-9200 X 239. John P. Napolitano CFP, CPA, PFS CEO U. S. Wealth Management, LLC Regardless of which road you choose it will not be easy. Switching Broker Dealers or custody of clients’ fee based assets under management involves client signatures and learning new systems. And your former BD or custodian may do whatever they can to delay the transfers out.

Maintaining a securities license seems to be a sensible plan to start out. Even though you may end up as an RIA only, there are probably clients who hold investment assets with 12B-1s or trailing commissions, or who are simply not ready to pay a fee for management.

I believe it is a good idea to go forward and start your own RIA. It is you that you want to brand, not your new BD. They should also allow you to choose any respectable custodian such as TD Ameritrade, Fidelity or Schwab. Most BDs will also want a share of the RIA fees that you generate.

The real question about having a BD in your pocket is, what are they doing to earn their fee? In our indepndent BD, we offer a tremendous amount of service way above the typical answer that a BD gives you… supoervision. We offer a full time CFA for portfolio design and management, we do the daily reconciliations, research, model building, re-balancing, trading, quarterly performance reporting and of course, compliance. We allow the advisor and client alike to access the reporting system on line and prepare ad hoc performance reports any time, and for any time frame that they wish. We will also do the analysis of a clients existing holdings, issue a report and then build a recommended portfolio based upon the RTQ and other client input. We also generate the IPS. Most professional advisors should not mind paying the BD something for as much service as this!

I feel the same way about financial planning. Many BDs do not take a share of your FP fees because they wouldn’t know how to do a financial plan if it were for themselves! The preparation of a plan should be with quality control and a formal review, just like an accounting firm would have a tax return or financial statement reveiwed before it is sent out. We thoroughly review financial plans and send the advisor back a list (sometimes quite long) of review points, questions and other issues to consider. These must be addressed, cleared or changed… then the plan is ready for client submission. Plans should not be biolerplate output from financial profiles or some other program… they should be customized documents written in easy to understand language, with backup or projections as needed.

Good luck with your transition. I look forward to following it. Call if you want guidance. 781 849-9200 X 239.

John P. Napolitano CFP, CPA, PFS
CEO
U. S. Wealth Management, LLC

]]> By: Jim Rhodes http://www.roadtoindependenceblog.com/2007/03/30/a-bumpy-ride/comment-page-1/#comment-157 Jim Rhodes Wed, 11 Apr 2007 21:45:31 +0000 ia-wordup-7607#comment-157 I agree with Jeanine. You have two years to from the time you were de-licensed to reinstate them by simply filing a U-4. You know, you can do fee business without giving up your licenses which you may one day regret. The larger "independent" B/D's become, the more they begin to look like wirehouses and the more they charge the advisor/rep. Might want to consider some other options in your area before you suicide the fee-only route. Times change, products change and philosophies change. Jim Rhodes I agree with Jeanine. You have two years to from the time you were de-licensed to reinstate them by simply filing a U-4. You know, you can do fee business without giving up your licenses which you may one day regret.

The larger “independent” B/D’s become, the more they begin to look like wirehouses and the more they charge the advisor/rep. Might want to consider some other options in your area before you suicide the fee-only route. Times change, products change and philosophies change.

Jim Rhodes

]]> By: JIM FREEMAN http://www.roadtoindependenceblog.com/2007/03/30/a-bumpy-ride/comment-page-1/#comment-156 JIM FREEMAN Tue, 10 Apr 2007 18:50:35 +0000 ia-wordup-7607#comment-156 Hi Mike, Sounds like somebody failed to communicate with you. Life is filled with bumps in the road. Some bumps lead to new and better paths. Your situation sounds interesting and your approach to wealth management is something any independent broker/dealer would love to see in practice. If you are intersted in the flexibility of fees plus commissions we should talk. We are a boutique firm that focuses on win/win/win situations, where we believe that if you do the right thing for a client and work smart, your fees will follow, and in turn as your broker/dealer, we too will benefit over time. You would receive a 90% payout (we wouldn't penalize you for being away from registration for 8 months) and you would have the ability to carry accounts at National Financial, Pershing, Raymond James and Bear Stearns. You can call me at (800)333-3502 or send me an e-mail at jfreeman@cantella.com. Maybe this bump was meant to lead you to us and we can discuss if we would be a good match for each other to help get you going. Hi Mike,

Sounds like somebody failed to communicate with you. Life is filled with bumps in the road. Some bumps lead to new and better paths. Your situation sounds interesting and your approach to wealth management is something any independent broker/dealer would love to see in practice. If you are intersted in the flexibility of fees plus commissions we should talk. We are a boutique firm that focuses on win/win/win situations, where we believe that if you do the right thing for a client and work smart, your fees will follow, and in turn as your broker/dealer, we too will benefit over time. You would receive a 90% payout (we wouldn’t penalize you for being away from registration for 8 months) and you would have the ability to carry accounts at National Financial, Pershing, Raymond James and Bear Stearns. You can call me at (800)333-3502 or send me an e-mail at jfreeman@cantella.com. Maybe this bump was meant to lead you to us and we can discuss if we would be a good match for each other to help get you going.

]]> By: Mitch Vigeveno http://www.roadtoindependenceblog.com/2007/03/30/a-bumpy-ride/comment-page-1/#comment-155 Mitch Vigeveno Tue, 10 Apr 2007 14:32:56 +0000 ia-wordup-7607#comment-155 Mike - There are a lot of aspects to deciding whether you want to be a "pure RIA" or position yourself as a "hybird" where you do both fee and commission-based business. In my view, as someone who has been placing financial advisors at independent firms for over 12 years, having the flexibility to do both kinds of business, especially when you are just strating your independent practice, makes a lot of sense. You can always focus on fee-based business with you clients or convert at a time down the line when you are better established. On the independent broker-dealer front there are some broker-dealers that are much more flexible than others and can support the type of business you do better than the one you have chosen. If I can be helpful to you in any way in terms of choosing a BD or a custodian for your assets, please contact me at mitch@tpisearch.com. There is no charge to you or any other financial advisor for this service. Mike – There are a lot of aspects to deciding whether you want to be a “pure RIA” or position yourself as a “hybird” where you do both fee and commission-based business. In my view, as someone who has been placing financial advisors at independent firms for over 12 years, having the flexibility to do both kinds of business, especially when you are just strating your independent practice, makes a lot of sense. You can always focus on fee-based business with you clients or convert at a time down the line when you are better established. On the independent broker-dealer front there are some broker-dealers that are much more flexible than others and can support the type of business you do better than the one you have chosen. If I can be helpful to you in any way in terms of choosing a BD or a custodian for your assets, please contact me at mitch@tpisearch.com. There is no charge to you or any other financial advisor for this service.

]]> By: Patrick May http://www.roadtoindependenceblog.com/2007/03/30/a-bumpy-ride/comment-page-1/#comment-154 Patrick May Wed, 04 Apr 2007 16:13:10 +0000 ia-wordup-7607#comment-154 I'm testing the comments. ~ IA consultant. I’m testing the comments. ~ IA consultant.

]]> By: Michael Patton http://www.roadtoindependenceblog.com/2007/03/30/a-bumpy-ride/comment-page-1/#comment-153 Michael Patton Tue, 03 Apr 2007 14:54:31 +0000 ia-wordup-7607#comment-153 I am aware that I have 2 years to reinstate my licenses. Also, my record is squeaky clean so I\'m not sure why the concern. Typically, they want to be assured that an OSJ knows what they\'re doing in terms of running an office and understanding the business. Anyway, I had chosen a B/D because it would allow me to do commission based business if the client preferred that over a fee based arrangement. I would prefer doing all fee based business and at this point I\'m strongly leaning toward an RIA platform due in large part to the restrictiveness of a B/D’s compliance. Since I\'ll be doing some writing and speaking an RIA arrangement is probably a better fit. The B/D said they would not need to supervise my financial planning activities but they changed their mind on other things so it’s hard to say for sure. I only know what they’ve told me. It’s entirely possible that since they are the largest independent B/D their size has created operational and communication inefficiencies of which I was the recipient. I am aware that I have 2 years to reinstate my licenses. Also, my record is squeaky clean so I\’m not sure why the concern. Typically, they want to be assured that an OSJ knows what they\’re doing in terms of running an office and understanding the business. Anyway, I had chosen a B/D because it would allow me to do commission based business if the client preferred that over a fee based arrangement. I would prefer doing all fee based business and at this point I\’m strongly leaning toward an RIA platform due in large part to the restrictiveness of a B/D’s compliance. Since I\’ll be doing some writing and speaking an RIA arrangement is probably a better fit. The B/D said they would not need to supervise my financial planning activities but they changed their mind on other things so it’s hard to say for sure. I only know what they’ve told me. It’s entirely possible that since they are the largest independent B/D their size has created operational and communication inefficiencies of which I was the recipient.

]]> By: Jeanine Broderick http://www.roadtoindependenceblog.com/2007/03/30/a-bumpy-ride/comment-page-1/#comment-152 Jeanine Broderick Mon, 02 Apr 2007 15:48:28 +0000 ia-wordup-7607#comment-152 Your licenses are good for two years after you become unregistered; it's an internal thing. Maybe they are worried you were performing tasks that required registration while unregistered for eight months? If you've been registered a long while and have a clean record I don't really understand why they would care about eight months. Good luck. Why had you chosen to go with a b/d rather than an RIA? Are you planning to do fee based business? Did you see Friday's court decision? Would the b/d want to supervise your financial planning activities and take a cut of your financial planning fees? Your licenses are good for two years after you become unregistered; it’s an internal thing. Maybe they are worried you were performing tasks that required registration while unregistered for eight months? If you’ve been registered a long while and have a clean record I don’t really understand why they would care about eight months. Good luck. Why had you chosen to go with a b/d rather than an RIA? Are you planning to do fee based business? Did you see Friday’s court decision? Would the b/d want to supervise your financial planning activities and take a cut of your financial planning fees?

]]> By: C WILFONG http://www.roadtoindependenceblog.com/2007/03/30/a-bumpy-ride/comment-page-1/#comment-151 C WILFONG Sat, 31 Mar 2007 19:36:35 +0000 ia-wordup-7607#comment-151 Mike, it looks like you got the bate, last minute switch. Better look for a new B/D. Mike, it looks like you got the bate, last minute switch. Better look for a new B/D.

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