Gimme Shelter
David A. Pickler, the chief executive and president of Pickler Wealth Advisors in Collierville, Tenn., hung out his own shingle in 2005 after spending 21 years in a shuffling series of merging wirehouses, the last of which was eventually engulfed by UBS. As a community activist in Memphis and its suburbs, he had a high profile. He was engaged in a local board of education, the Boy Scouts and a school for the deaf. Not to mention the fact that he was press friendly. All of these things put him at odds with his company.

Starting from scratch, he literally raised his own roof: erecting his own office building in an office campus (and burning the mortgage in 2006). He now regularly holds "lifestyle events" for his clients: ladies fashion shows, scotch and cigar parties and dinner theater, all with the blessing of new partner LPL Financial, which, unlike UBS, has celebrated his high community profile instead of discouraging it.

A big question for him when he made the move was what kind of business model to set up, especially since he already had his hands full with a connected law practice. He weighed the option of becoming his own RIA as he sought relationships with a lot of the major players like Raymond James, Commonwealth and LPL. One of the things that weighed on his decision was his desire to give his clients the same sense of comfort from a large-back office operation-the full-service complement they'd get at the UBSes of the world-as well as the comfort that there was a lot of capital around if something went wrong. Thus he chose to work under LPL's corporate RIA structure.

"I think it was two things," he says. "The fact that I was unwilling to take on the burden of all the compliance responsibilities at that point and the second was, I believe the stability from a staffing standpoint of being able to outsource all of those other responsibilities to LPL was to me the overriding reason why we chose to practice in the model that we are."

Working under the corporate RIA of a broker-dealer could be considered an intermediate step to total freedom later on, but in a new turn of events, say the B-D execs, the RIAs are in some cases fleeing the RIA independence, making a reverse migration and coming under the corporate RIA wing. One such advisory is D.B. Root & Company Inc. in Pittsburgh, which converted to Commonwealth's corporate RIA around the year 2000.

"We made the decision to do that for a number of reasons," says Carrie Coghill Kuntz, the company's president and partner. "Even just looking at our cost to maintain compliance, we had a full-time person that was doing all of the reporting and the downloads and everything. When we compared the costs to the services that we would be picking up by moving [to Commonwealth] it made a lot of sense for us. From there you know what we've learned since and what we're very thankful for ... is that level of technology support that we get under the corporate RIA, the reporting and the compliance issues."

Among other things, she cites Commonwealth's online reporting and its performance reports and market commentary as powerful tools in her hands when she's connecting with clients. She also says that RIAs continue to struggle today with things like alternative investments when they're on their own.

Bill Morrissey, LPL's executive vice president of branch development, says that in many ways the IAR and RIA experience is the same, except that an advisor can rely on his broker-dealer's technology and open architecture. "They can gain access to the same programs that they had at a wirehouse and the logistics of going independent have never been easier," he says. "If you don't already have a space, we can help you find a space and build it out. We offer a group health care plan. In either model, the advisor owns their own business."

First Affirmative Financial Network LLC in Colorado Springs, an SEC registered investment advisor, has about 35 advisors working as IARs, according to president Steven Schueth. He says that there are three things that independent advisors need to do well to operate as an independent: the administrative piece, the client relationship marketing and the money management.

To go all the way to independence, he says, requires the person to "have not only high capabilities but let's say a pain threshold around filings and compliance-related things." From there, he says, the decision about whether to become an IAR is one of due diligence-figuring out the costs, the trade-offs and the hassles of working with the broker-dealer. Because, after all, the relationship isn't free. "There's going to be some cost involved, and [the advisors are] not going to get 100% of the fees that they charged the client."