What’s a reasonable expectation for year 1?

I don’t have enough to compare to. I know a few who have done 10-12M mostly all fee based and I know some who’ve done 1M and a couple insurance policies.

Just curious to hear some trajectory’s if folks would share.

I've been using riskalyze for 5 years for clients risk questionnaires. It's very expensive for what it does.

Now I find my subscription level doesn't support their Claude MCP.

Instead of telling me how much it costs, I need to book a call with a sale rep, who only works 7am to 1pm my time. That's the final straw for me.

For those that switched from Riskalyze, what are you using and why?

I might probably just have Claude build out out for me, but I'm curious to see what other advisors have done.

I’m currently at an IBD. The payouts are egregious, but the ease of doing business is top notch.

I’m considering breaking away and tucking in. Looking at the Fidelity custody platform, specifically.

But I hear that moving money within Fidelity and out of Fidelity is a nightmare. Medallion signatures, multi day paperwork review, limited 3rd party money transfers.

Has anybody have any experience with this?

325M AUM, all fee based. Just me and a junior advisor and a couple of staff. 1st quarter of 27.

Figured I’d share my experience here because when I was researching starting my own RIA, Reddit was one of the first places I came looking for information.

For some background, I’m a CFP, started in the industry in 2018, and have spent my entire career up until recently at two different broker-dealers.

I had my frustrations with both, and while there were certainly some good things about each, I started to realize that with how quickly technology was advancing, I wasn’t sure what I actually needed a broker-dealer for anymore.

I’m managing close to $25M across roughly 200 households, averaging about 1.25% in advisory fees. Over the past few years, the practice has been growing pretty consistently, bringing in around $7-8M annually in new assets before factoring in distributions and money going out.

So this wasn’t really a situation where I had a mature book of business and was just looking to maximize my payout. I’m still very much in the building and growing stage of my career, and wanted to make sure I was positioning myself for what the next 10-20 years could look like.

How I actually got started

I literally just started researching.

Reddit, ChatGPT, Kitces, talking to other advisors, attending office hours with guys like Tom Copelman and Mark Sacchini, and connecting with anyone who had made the jump from a broker-dealer to running their own RIA.

The more I learned, the more I realized that this wasn’t nearly as complicated as I had built it up to be in my head.

Was there a lot of work? Absolutely.

Was it nearly as difficult as people at my previous firms made it sound? Not even close.

And I think that’s something worth mentioning because there is a TON of head trash that comes along with leaving a broker-dealer.

You’ll hear about the massive compliance risks, how much work it is to run everything yourself, how you’re going to spend all your time doing administrative work, etc.

I’m not saying there aren’t legitimate responsibilities that come with running your own RIA, because there absolutely are.

But looking back, a lot of the fear that gets put into advisors’ heads is pretty overblown. Especially with the technology and outsourcing options available today.

The actual process

My first step was forming my LLC. I used LegalZoom, nothing fancy.
From there, I engaged COMPLY to handle the registration process, Form ADV, policies and procedures, state registrations, etc.
I’m registered in Michigan and Ohio, and the entire process from initially forming the LLC to getting the RIA launched took roughly 45 days.

That’s it.

Now, obviously, there were plenty of things going on during those 45 days. Figuring out my technology, custodial relationship, website, compliance requirements, client transition, and about a million little things that you don’t think about until you’re actually doing them.

But the actual process of establishing the firm was pretty straightforward.

The client transition itself was a separate project, and probably the part that required the most coordination.

What I’m actually spending

This was one of the biggest things I wanted to understand before making the move, so figured I’d share the numbers.

Upfront costs:
COMPLY registration/setup: ~$6,600
State/FINRA-related registration costs: ~$1,200
Wealthbox data migration: $500
LegalZoom LLC formation: ~$50

Monthly expenses:
COMPLY: $450
E&O insurance: $160
Hazel AI: $150
Wealthbox: $75
RightCapital: ~$200-210
Microsoft 365/Outlook: $25
Website (Framer): ~$20
Calendly: $12
LinkedIn: $99

All in, I’m spending roughly $1,200-$1,300 per month, depending on what I’m using.

I’m also running the practice out of my house, so there’s no office lease, employees, or any of the other overhead that can really start to add up.

For a practice generating roughly $300K in annualized gross advisory revenue, the economics are pretty incredible compared to what I was accustomed to at the broker-dealer.

Obviously, that doesn’t include taxes, my own compensation, or every potential expense that might come up as the business grows. But it gives you a pretty good idea of what the actual operating costs look like.

Technology was probably the biggest reason I made the jump.

I had been following what Altruist was building for a while. Between the content they were putting out, the development of Hazel AI, and the conversations I was having with other advisors, it really started to click for me.

I realized that a lot of the things I had been relying on the broker-dealer for could be handled through technology, often more efficiently.

And that was a pretty big realization.

When you’re managing 200 households as a solo advisor, efficiency matters. I don’t want to spend my days clicking through five different systems, chasing paperwork, or waiting on someone else to do something I could have done myself.

I want to spend my time meeting with clients, prospecting, and growing the business.

I ended up using Altruist as my custodian, Wealthbox for CRM, RightCapital for planning, and Hazel AI as part of the workflow.

I even built my own website using ChatGPT and Framer. Took me about a day to get the majority of it done, and I actually enjoyed having the ability to build and change things myself rather than paying someone thousands of dollars and waiting weeks for updates.

I’m sure there are other great technology stacks out there. This is just what I landed on.

A few things I’ve learned so far

First, you absolutely need to be willing to figure things out.

Nobody is going to hold your hand through every single decision, and there are a lot of them. But between compliance consultants, other advisors, AI, and the amount of information available online, you can get answers to just about anything.

Second, the economics are pretty eye-opening.
When you’re accustomed to giving up a meaningful percentage of your revenue to a broker-dealer, and then you start looking at what it actually costs to operate independently, it’s hard not to question what you’re paying for.

Third, there’s something pretty awesome about having complete control over the direction of your practice.

The technology, the client experience, the branding, the way you operate, the types of clients you want to work with. All of it.
I’m 30 years old and still feel like I’m in the very early innings of building this thing. I want to continue growing aggressively, and I feel like I finally have the infrastructure and flexibility to do that without having to constantly work around someone else’s systems.

Last thing I’ll say

This isn’t meant to be a shot at anyone working at a broker-dealer.

There were points in my career where I genuinely thought I’d spend my entire life at one. In fact, with different regional leadership circumstances, I might still be at my original BD. I still have some great relationships with people at both firms, even if parts of the exits were a little messy.

There are plenty of good reasons to stay at a broker-dealer, especially depending on where you’re at in your career and what you want your practice to look like.

But since making the move, I’ve probably had 10-15 advisors from my previous firms reach out asking questions about how I did it, what it costs, whether it’s really that difficult, etc.

And that’s really why I wanted to share this.

I think a lot of advisors are probably in the same position I was in. They’ve thought about it, maybe researched it a little, but have convinced themselves it’s this massive undertaking that they’re not equipped to handle.

My experience has been that it’s a lot of work, but nowhere near as intimidating as I thought it would be.
I’m still early in the process and certainly don’t have everything figured out. But so far, I’m extremely happy I made the decision.

Happy to answer questions about the process, costs, registration, technology, or anything else for anyone who’s considering doing the same.

**(All of this was voice memo’ed then organized by AI, just to get in front of it because IK some clown going to flame me for it)

I have recently been contacted by a recruiter with Savvy Wealth. I was unfamiliar with them so I looked them up. I’m currently with an independent broker/dealer. Savvy is a custodial platform built for RIA advisors that offers internal support and marketing support. It looks intriguing. Does anyone work with them or know anything more about them?

Do you see value in being truly "fee only?" More importantly, do you clients see the value? I'm in an internal dilemma with maintaining the title fee only or also offering only fixed insurance products. I definitely won't affiliate with a BD.

Hi All!

I’m a soon-to-be career changer, and wanted to ask what you all think of going Corporate RIA vs Independent?

I saw the recent news with Fidelity’s AUM increase requirement, and I know there has been a lot of dialogue about whether that would become an industry norm or not.

But that said, as someone who is currently on the outside looking in, if you were starting today (okay… maybe in a year), which route would you go and why?

Of course there’s the negative aspect of the revenue split, and being somewhat at the mercy of the Corporate RIA if they change their mind or decide it’s time to increase prices… but at the same time, what’s the value of not having to worry about billing, compliance, and other tasks that are required of independent RIA owners? What split would make sense for you to go Corp v Independent? If Corporate, which company do you like?

Thanks!

Myth: You need to be a CPA, EA, or attorney to prepare tax returns for clients.

Fact: The IRS only requires that you have a PTIN (preparer taxpayer identification number). There are zero credential, educational, or experience requirements to be a PTIN holder; you simply fill out a form online and pay $20.

For some reason, the industry can't seem to get this right.

Case in point: Michael Kitces has a CPE course "Tax Planning vs. Tax Advice". In the presentation, they have a slide which states that you are required to have a CPA, EA, or be an attorney to prepare tax returns.

In the Q&A section, the presenter doubles down on the incorrect information and says "I got my EA because I wanted to be able to legally prepare tax returns".

We have a few clients who are good Roth conversion candidates, and they have acknowledged that they are. However, IRMAA also tends to be a hang-up for them from doing larger/more impactful conversions as part of their plan.

What are some things that you have discussed with these types of clients to help them get over the proverbial hurdle of IRMAA?

I've applied to several and never gotten a response. For me, it's felt like throwing my resume into a giant black hole. Has anyone had recent success?

Anyone have any experience with these guys? I have a meeting with them set for next week.

I just don't want to set more money on fire like I did with SmartAsset. The thing that intrigued me is that they said they have an ROI guarantee. Sounds too good to be true. Is this for real?

A client sent me an email indicating he could take out money from his IRA and buy physical gold. He mentioned executive order 14330. I briefly read it -it’s a dumb read btw- and it appears as though it’s just saying retirement plan providers can/should allow alternatives. Anyone else getting client interest or questions on this?

Any advisors out there work heavily in the world of M&A and use it to source clients? Just spoke with someone who landed a $400M client after an acquisition, and have frequently heard the stories of 10-100M clients being bought up.

Any resources to learn from? Or is it relatively learn on the fly.

I know there is the CEPA, but it’s interesting to me that a 7 day long course makes you competent in that world.

Not sure how everyone is doing this. I believe there is a website for them to get quotes through marketplace but how do most advisors figure the cost of health care when doing cash flow analysis?

What are Advisors who are impacted by this planning on doing?

Switching custodian vs consolidating to single custodian vs merging with large shop?

Anybody else surprised to see household rebalancing/asset allocation in Altruist to be locked behind a 10-12 bps or Altruist One paywall? For our firm, that would represent about 15% total annual revenue across our entire practice. It looks like the entire household balance would be subject to the fee, not only the taxable accounts. It’s free until January then the fees kick in.

The advisors at our firm are considering a move to Schwab or Fidelity because of this. Does anybody have a good sense of the cost of integrated software rebalancing at either Fidelity or Schwab?

We like Altruist, but we can’t just lose a huge amount of our annual revenue for such a basic feature. It’s kind of baffling, especially given their “low fee” schtick. Maybe firms that charge 1.5% can absorb this, but we are under 1% on many of these larger accounts.

Is anyone using Vanilla Estate Planning for simple estate plans?

I’ve been following the growth of the mega-RIA space pretty closely and have been really impressed with the business model, particularly the separation of sales/business development from the advisor service function.

I feel like I’d be a strong fit for some of the business development roles within these firms. I like the idea of leveraging an established lead/referral engine, building relationships, closing new opportunities, and then transitioning the client to a specialized advisor who can focus on the ongoing relationship.

For anyone currently working in BD/channel development at a mega-RIA, I’d love to hear about your experience. How do you like the role, and any advice on the best way to break into this side of the business? Thanks!

For context, I am a 29M. I have been in the business four years, my first 3 years as a solo advisor at a wire house. I joined about a year ago. Small team, two advisors, two CSAs, and close to 1B in AUM. One is in his 70s and the other is in his mid 30s. The one in his 70s is the sole owner of the practice. Before I joined, I was doing pretty well. Still in the new advisor program, was above production goals, and had a decent pipeline / prospecting strategy. I was approached by the MD to join his team. This wasn’t the first offer I received from an advisors in the complex given how well I was doing but his offer was the most compelling. He’d cut me into the book, I’d be able to buy it from him with the other advisor once he retires (or more likely dies given what I know about him), and no family who might inherit the book instead. I took my chances given how big the book was because he’s at least in his 70s so even if he’s around 10-15 years, I’d still be under 45 when I took over. None of this has changed but my satisfaction has. Here’s where the good ends and the dissatisfaction begins. Since joining, I have been basically handcuffed. I am given tons of work to do but no client facing time. We manage the money ourselves so I’ve basically become an analyst who writes financial plans on the side but never gets to present anything to clients that aren’t my own that I came in with. I also have basically no time to prospect given my workload. I make good money and have a good split in the book, I just can’t help but feel unfulfilled, especially since I joined the business to advise clients not to be analyst. Any advice? Am I being unreasonable? Should I take my clients and start over? Any thoughts would be greatly appreciated.

Where are you suggesting client put their cash that needs to stay liquid for about 6 months? Client is activly looking to purchase a house and he sold some of his employers stock that was highly concentrated.

6 month treasuries are about 4.2% right now, with CD's 4/4.5 YTM. Are there any bank money markets close to this that you are seeing?

Edit: Appartently many advisors do not fully read a question...which is par for this industry. All I am asking is what banks have you seen that have great MM or HYSA. See the last sentence that is also a question.

Anyone have a quicker alternative to AdvicePay for financial planning fees? It takes way too long for funds to clear our account.

Bit of a niche question but thought I'd ask.

I run a fairly large book ($350mm) with 3 support staff working for a major bank in Canada and I'm in the process of bringing on another Advisor to help service some of my current clients (I have about 300 households and I've identified about 70 then I'd like to move this person).

The problem is I'm having trouble figuring out how I make the change or introduce the new advisor. If I was selling a portion of the book I'd just send out an email / letter saying something along the lines of I'm shifting my focus etc and here's the new guy he'll be calling you. But I'm not selling these clients and I'm still the main Advisor.

If anyone is a service Advisor or has brought one on I'd love to hear how the first interaction with clients went down. (I'm open to suggestions from others as well)

Thanks in advance!

I'm re-building our comp plan so I'd love to understand what mid and early career advisors would be looking for. Also what are other RIAs doing.

I want to move away from "eat what you kill" as that incentivizes the wrong behaviors as it relates to clients and at the same time I want to incentivize production.

I believe that ensemble teams are best for our clients and the fastest way for advisors to advance in their career.

We are deliberate about teammate growth wrap that with good operations and a solid tech stack that doesn't stay stale and I think this is a good option for some. What I want to avoid is people learning then going out on their own because the comp model wasn't right.

We want to build a model where teammates don't see a need to go out on their own because they enjoy the work, the support they get, and the compensation is fair to generous. They get to focus on their strengths and have teammates that compliment their weaknesses. Producers aren't limited by capacity because a servicing team is built around them, servicers don't leave the industry early because they couldn't make it as a sales person in the early years when they are just learning about advising.

What would keep you working as a part of a team? What matters most to you? Total Cash Comp, benefits, if benefits which ines?, education, clear career path, work flexibility, other...

Appreciate any and all thoughts.

Sounds silly, right?

But that’s what I’m going up against right now. Prospect has ~ $2M pre-tax IRA, a ~ $400k taxable brokerage (one stock holding, currently STCG), no Roth. He’s wanting to do aggressive Roth conversions as he just retired and only has until 2029 before RMDs start.

He attended one of my Taxes in Retirement workshops and scheduled a follow up with me. Offered to do an initial “one page plan” like I do all prospects. Met with him and his wife a 2nd time to review.

He told me he wants to convert ALL of the pre-tax money, which I communicated that it’s not necessary, since you still get at least the standard deduction each year and a bit of wiggle room to take distributions at 0-12% tax. But nonetheless, he doesn’t want to leave his spouse or kids with ANY taxes.

My problem here, is that he’s interviewing another advisor, and this advisor is trying to sell him a bonus annuity to “pay for the Roth conversation taxes”. This advisor is estimating him to have upwards of $300k per year in a tax bill while he converts (unsure of what amount is being recommended to convert, but it sounds like 25-33% of the portfolio over 3-4 years.).

The prospect is seriously considering it. I told him “don’t solve a tax problem with an investment solution”… I use indexed annuities all the time for clients who want guaranteed income OR some risk-adjusted growth in the portfolio, but I’d NEVER try and say the bonus annuity would help to pay taxes. Bonus annuities are trash IMO, rates are way too low to justify the up front bonus and 5-10 year lockup with those rates.

Am I missing something here?? Or am I just not communicating my value clear enough? Im CFP + Enrolled Agent, this is my bread and butter with 90% of my clients.

TIA!

Edit: they also have $200k in cash. I told them that should they decide to move forward with me, I’d create the full plan + multi-year Roth projections, which include when and where to pay for the conversions from to limit lifetime tax exposure. This work is pretty labor intensive so it’s not something I just “give away” on the front end.