At a time when many custodians are setting up lending programs to help RIAs finance acquisitions and internal succession, a top lawyer sees the programs as problematic.

Margaret Sheehan, an attorney in the Washington, D.C., office of Ashurst, a global law firm, says obvious conflicts of interest are associated with such loans. "There are some conflicts of interest you can't disclose away," she says.

Specifically, Sheehan sees any quid pro quo arrangement requiring an RIA to maintain a certain amount of assets at the custodian making the loan as a clear-cut conflict.

"The SEC views the custodial business as an asset of the client, not the advisor," she maintains. As a result, an RIA could be viewed as trading on an asset that isn't theirs' to trade.

Sheehan also thinks it could be tenuous for an RIA to argue that the loan benefits the client as well as the firm. An RIA might claim that an acquisition permits the firm to expand its reach, add services, deepen its bench and add scale.

"That seems like an indirect benefit," she says. When it comes to soft dollars, the SEC says they can be used for research or better execution, but not to pay for overhead.

TD Ameritrade Institutional and Schwab Advisor Services have announced they plan to roll out such loan programs next year. Fidelity and Pershing have indicated they occasionally have made loans to RIAs as well.

All four custodians either are owned by larger banks or have bank affiliates. Presumably, they could place the lending programs under the umbrella of another entity to create a Chinese wall of sorts to reduce the appearance of conflict. Sheehan also believes it would be advisable for RIAs to seek loans from several sources to demonstrate that they could obtain a loan from another financial concern with which they had little or no other relationships.