How Does Investing Work as an RIA?

How Does Investing Work as an RIA?

In today’s episode of the AccelRIA Podcast, Freeman Linde outlines “How Does Investing Work as an RIA?” Freeman is a Certified Financial Planner, Enrolled Agent, author, and the co-founder of La Crosse Financial Planning. An RIA in La Crosse, WI. Today’s topics include:

Investing at a Broker-Dealer

• Working through Broker-Dealer to Custodian
• Premade Models
  • Some good ones
  • Easy button
• Self-made Models
  • What I wanted, but more work
• Custody/Platform/Strategist/Trading Fees
• Client is willing to pay you instead of the fee

Investing at Schwab

• Custody
  • No Broker-Dealer middleman, Direct Access
  • Research Tab, Results, Reporting
• Models
  • Create Models (IRAs vs. NQ)
  • Accumulator vs. Pre-Retirement vs. In Retirement
  • Rebalancing
  • Automatic Investment of Contributions
  • Alerts for drift/cash
  • Raise cash for all
  • 100% Invested
  • No Fees
• Billing & Reporting
  • Quarterly/Monthly Billing
  • Cash must be available, Raise Cash last week of quarter
  • Monthly Statements from Custodian
  • Customizable
  • Why train your clients to track performance?
• Fees
  • Custody Fee: $0
  • Strategist Fee: $0 or %
  • Trading Fees: $0 ETFs/Stocks, $0 on NTF MF
    • Broker-Dealer Charged a percentage
  • Billing: $0
  • Reporting: $0
  • Support: $0

RIAs: Increase Work & Profit

• Sounds like a lot of work
  • It is more!
  • A few hours per quarter
• Broker-Dealer is providing value, but is it worth what you are paying?
• Hiring Administration
• Compounding Revenue + Fixed Expense = Exponential Profit
• Reinvesting

Who Not How

• We’ve Evaluated
• AccelRIA Toolkit
• AccelRIA Discounts on tech

Action Items

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• Consider Operations Staff
  • How much more work could they do?
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