Schwab Advisor Services is rolling out new resources to help support advisors considering making the transition to become a Registered Investment Advisor.
The campaign is part of Schwab's rollout of resources to help support advisors considering full independence as an RIA. Schwab Advisor Services is a leading provider of custodial, operational and trading support for nearly 7,000 independent RIA firms.
Schwab also is releasing a white paper, Legal and Regulatory Considerations: Navigating the Transition to Independence as an RIA, which is part of the Schwab's Market Knowledge Tools white paper series.
In addition, Schwab is launching dedicated Web site content for advisors currently at independent broker-dealers (IBDs), providing information for evaluating a fully independent or hybrid practice model, which allows RIAs to conduct a combination of traditional brokerage and fee-based advisory business.
The site will host podcasts and webcasts tailored for the needs of advisors at IBDs. Three video testimonials walk viewers through firsthand accounts of transitions told by advisors who worked previously at IBDs, offering insight into how they made the transition.
"Whether you are considering starting your own RIA, joining an existing one or exploring a hybrid model, the transition process can seem daunting for many advisors," said Nick Georgis, Schwab Advisor Services vice president. "These new resources offer insights into the process, including how to plan and implement a transition and several time-tested procedures that have served many highly-successful advisors who have made the switch."
The key to a successful transition, says Georgis, lies, in large part, in adequate planning.
"Advisors need to determine early on what they want their firm to be, and then build the infrastructure to support that vision," said Georgis. "By consulting with experts who have been through the process and utilizing available resources, advisors can avoid many pitfalls and move toward a rewarding, independent career."
Developed in conjunction with MarketCounsel, the new white paper suggests advisors weigh legal and regulatory considerations and requirements around independent RIA models by focusing on the following areas:
Assessing your employment situation and formulating an exit strategy. As a first and critical step, an advisor should engage legal counsel to conduct a review of various agreements in place.
Evaluating your needs, goals and objectives. An advisor should first chart their vision through the development of a strategic plan assessing their client base, as well as products and services they and their clients' desire.
Choosing your entity's legal structure. Once an advisor has decided to make the transition, it's important to decide upon a legal structure for the new company.
Protecting your business from the unexpected. Prior to commencing operations, advisors should obtain insurance to protect against business risks, including errors and omissions insurance in particular.
Determining the type of licensing and registration required. Assuming advisors will be required to register as an investment advisor, they will need to determine which regulatory authority, either state or SEC, with whom must register their firm.
Preparing and filing appropriate disclosure documents and form filings. Advisors are held to a higher standard of disclosure than other professionals and must disclose all material facts regarding conflicts of interest.