re the questions they should be asking. For advisors in different stages of their careers, we can customize their affiliation with us.”
At the core of all relationships between advisors and their broker-dealers is a matching philosophy about the financial industry, says Scott A. Curtis, president of the private client group at Raymond James. The industry is changing, and advisors want to select their affiliation model.
“We continue to see a migration of advisors to the fee-only model, which has grown dramatically, and we are building out services for this group,” Curtis says. “We are focusing on the RIA space because the growth in that space will outpace the more traditional affiliations and business models. Advisors can affiliate as independent contractors, work under the Raymond James RIA or be a hybrid of the two.”
“What has changed the most—not related to Covid but maybe accelerated by it—is technological flexibility. Two years ago, some technology we use now did not even exist or it was not used as much,” Curtis says. “For instance, a little thing like scheduling appointments online is now common. Another example of technology is the client being able to control his or her own finances online through Venmo, PayPal or Zelle.”
Raymond James explains that advisors do not have to operate a traditional business model in today’s financial industry. Advisors can associate in various ways, such as joining as an employee of Raymond James, backed by the resources of a large broker-dealer.
Another major shift in the industry in recent years is that broker-dealers have to offer ESG (environmental, social and governance) options for the advisors or they are not fulfilling their mandate from clients, Curtis says. Raymond James does the research for the advisor and gives him or her a more competitive advantage.
Third-party vendors such as Docupace are helping create more efficient affiliations between advisors and broker-dealers, especially advisors crossing business models. Docupace is a technology company based in Los Angeles that offers unified workflow and document management automation solutions for financial services firms.
The problem many advisors face when they are thinking of joining a broker-dealer is that they are not “transition ready,” says Docupace CEO David Knoch.
“A financial advisor is only likely to transition to a new broker-dealer once or twice in a career, and they become extraordinarily anxious about the move,” Knoch says. “With a third-party assistant, the advisor and the broker-dealer can relieve the tension and concentrate on transitioning the clients.
“One of the challenges many advisors face is preparing for the transition. We are working with an advisor now who has documents in many different programs and on different platforms. For instance, they do not know the tax brackets for all of their clients and the new broker-dealer demands that, so we help them become transition-ready. Being transition-ready even when you do not want to transition becomes a good business practice.”