The amount of payout the advisor hands over to the broker-dealer in an IAR relationship can vary-from 5% to 20%, depending on the different pay schedules.

For these and other reasons, there's a certain point at which it's worth the extra trouble for an advisor to go it alone and to work either as an independent RIA affiliated with a broker-dealer-or as his own RIA totally free from such an affiliation who custodies his assets at a Charles Schwab or Fidelity. After a company reaches the gold standard level-a continuous $25 million in assets under management-it can then register with the SEC as an RIA, submit an ADV form, drop FINRA licenses and declare freedom (with fewer assets than that, the advisor has to register instead as an RIA within its own state).

Gregory Gardner, a CFP and RIA with the Gardner Group in Dallas, struck out on his own about six years ago after working under LPL's corporate RIA for about ten years and working with the company's fee products. He says that at the time he could only offer pure financial planning advice and couldn't manage money under his own RIA. He says it was nice not dealing with the infrastructure of reporting or fee collecting, and he liked LPL. But he says the business he was building forced him to make a change. He eventually wanted to offer more products at more places, to use multiple custodians and to use performance software of his own choosing. He also said compliance as a stand-alone made more sense because there is only one set of rules to follow when you're an RIA. After all, the corporate RIAs, for their own legal reasons, have to make sure their IARs are in compliance, and sometimes, simply because they are also broker-dealers, they are still thinking in terms of FINRA rules, not just SEC rules, and that's something that's reflected in the audits.

"I am an entrepreneur at heart and I wanted to build a better mousetrap for my clients," Gardner says. "When I started to figure out where the money was made in this business, I knew we could legally cut some corners and reduce costs for our clients, so we were able to shave 10% to 25% in expenses to our clients and give them a much more open architecture and an a la carte offering."

Still, he says, "To be a pure RIA, it's pretty darn expensive. I would say it's ludicrous with under $25 million [in assets under management] and it's pretty darn expensive under $50 million."

Steve Stocker, the managing partner and founder of RIA firm Investment Partners LTD in New Philadelphia, Ohio, says that being an RIA offers other kinds of flexibility as well. "Certainly I guess a couple of reasons to consider your own RIA would in fact be the flexibility you enjoy at designing your own programs," he says. Furthermore, "There's a good chance that my own RIA will hold greater potential value in a sale or merger circumstance than my client list as an IAR of the broker-dealer."

But the downside, again, is the tremendously elevated level of compliance.

"I have a person who spends about 50% of her time doing compliance related issues," Stocker concedes.

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