![]() Due to their sheer size and market reach, these providers all already provide the core technology necessary to trade in client investment accounts, hold a wide range of standard investment assets, facilitate the advisor's AUM billing, and do it all at an incredibly low cost. However, given the dominance of the AUM model, and the number of advisors who do want to manage investments, most independent RIAs will ultimately form a relationship with one or more of the top RIA custodians.įor those independent RIAs that do need to use an RIA custodian, the overwhelming majority ultimately custody their assets at one of four major firms: Schwab, Fidelity, TD Ameritrade, and Pershing Advisor Solutions. ![]() The first thing to consider when contemplating an RIA custodial relationship, is whether a custodian is actually needed in the first place. For advisors who are simply going to charge financial planning fees, and bill clients with a third-party payment processing solution for those finanical planning fees, and while letting clients continue to be self-directed with their actual portfolios (or serve clients who simply don’t have portfolios to invest), then the advisor does need to become an RIA, but doesn't necessarily need an RIA custodian. In this week’s #OfficeHours with my Tuesday 1PM EST broadcast via Periscope, we explore how to choose the best independent RIA custodian for your business, including the advantages of working with one of the "Big Four" custodians (Schwab, Fidelity, TD Ameritrade, and Pershing Advisor Solutions), as well the reasons why some firms may find a better fit among smaller "second-tier" custodians with more niche offerings for certain types of RIAs! For advisors who want to provide investment management services to their clients, though, and intend to play an active role in managing and implementing client portfolios, one of the most important decisions they face is which RIA custodian they should work with. Advisors who are interested in starting their own advisory firm, or breaking away from an existing one, face a number of important business decisions – from how they want to structure their firm, to what clientele they will target, what software they will adopt, and when/whether they want to hire staff or outsource certain responsibilities.
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