Aside from that, there may even be an expectation that you stay with a firm for a period of time to recoup that initial investment they agreed to make in you. If you need to stick it out five years with a firm before you have to repay the amount they offered to bring you onboard, you need to be absolutely certain that you and your clients will be better off five years from now than you are today.

Keep in mind, though, that you need to do what’s in the best interest of your clients. You can end up changing your mind to do what’s best for them; however, be aware of the legal ramifications you could bring on yourself if you do decide at some point in the future that a change is needed.

Know Who “Owns” Your Clients
Speaking of your clients, understanding your employment agreement with an RIA firm is the clearest indication of who actually owns the relationship with your clients.

While it’s often said that one of the benefits of joining an RIA is that you “own” the relationship instead of the firm, as is common with a wirehouse, that isn’t always true when you get down to the legal definitions.

First things first, will you be considered an independent contractor or an employee of the RIA firm? How your relationship gets determined by the firm will in turn determine your relationship with clients.

In short: If you’re an employee, the RIA firm probably gets to claim that those clients really belong to them, not to you. And that’s why some advisors have found themselves in hot water recently when they left to create their own businesses.

While it may be tempting to say that your clients are yours because you moved them over from the wirehouse to the RIA along with you, that may not be the case unless your contract explicitly says so.

You can think of it like owning a house. When you own a home, you do it all – the landscaping, interior repairs, and pay the utilities.

If you go from owning a home to moving into a condo, however, you’re no longer responsible for all that. You still live in a “house” but the person responsible for it has changed.

As a final word on this subject, for all the talking down that RIAs sometimes do about the independent broker-deal industry, that side of wealth management has always honored the fact that their advisors are independent affiliates. There’s no confusion about structure. RIA firms and their advisors would do well to take a page from that notebook and talk about “independence” with the clear definition it deserves.