Not everyone is throwing in the towel in running a broker-dealer.

As the number of broker-dealers continues to dwindle in the face of compliance and cost pressures, some RIA firms are forming their own B-Ds to handle legacy securities businesses and facilitate the use of alternative investments.

Compliance consultants say they’ve seen an uptick in interest from RIA firms that want to run their own B-Ds.

“Most are doing it [because] they struggle with the due diligence process at the B-D they’re with,” said Christopher Winn, founder of AdvisorAssist, a compliance consultant.

Ryan Shanks, chief executive of Finetooth Consulting, has had one RIA firm create a B-D, and he has another one in the process.

“They feel they’re missing opportunities for clients” by not having access to brokerage products or private deals, Shanks said. They believe that “to be really independent, they need their own B-D.”

David Millican, founding partner of ACG Wealth in Atlanta, which has its own B-D, thinks more hybrid firms will do the same as so-called RIA-friendly B-Ds that support hybrids consolidate and get bigger. “When you do that, you become a B-D of the masses,” Millican said.

ACG has about $1.9 billion in client assets, $500 million of which is brokerage business run through its own B-D, Arkadios Capital. Arkadios was formed after a dispute arose in 2015 with ACG’s former B-D, Triad Advisors. ACD left Triad in late 2016.

Arkadios handles ACG’s legacy brokerage business as well as private equity deals, Millican said.

His higher-end clients don’t want the “canned alternatives” available to thousands of reps on a big B-D platform, he added.

Typical of most hybrid firms, Millican thinks longer-term, illiquid holdings like alts and bonds work well in commission accounts where they don’t pay ongoing fees.

“If [clients] pay a commission and still get the same terms … they’re better off,” he said.

Another RIA firm, Summit Trail Advisors, a $3.3 billion shop based in New York, uses its B-D, Summit Trail Securities, to facilitate investments in private equity and credit.

About 10 percent of its business comes from the B-D, which Summit launched early this year. “It’s an important part of our business,” said Jack Petersen, a founder and managing partner.

Summit does due diligence and has access to a select group of private managers, Petersen said, and offers those managers to some institutional clients.

In these cases, it doesn’t make sense to charge an advisory fee on what amounts to a single product sale, Petersen said. Summit gets placement fees from the private managers.

What about the regulatory risks of running a broker-dealer?

Summit Trail Securities’ private institutional business is large enough to warrant the time spent on compliance, Petersen said. And it is a limited-purpose broker-dealer under Finra rules, which allows private transactions using a streamlined regulatory structure.

ACG committed to investing in compliance expertise for its broker-dealer, Millican said.

If you take running a B-D “very seriously and understand that the only thing that can hurt you is [lack of] compliance, then it’s not an issue,” he said.