I'm in the process of setting up an RIA firm and had a few questions that I was hoping folks here could help with. Little background on me, I work as a Sales Analyst at Blackrock, but I previously worked as a Financial Advisor before that for about 5 years. I left due to frustration when it came to the fee structure and just not having as much autonomy as I had hoped to have. Blackrock has been fine, but Sales isn't my passion and I feel if I don't make the move now I never will..
- After looking over Form ADV 1 and 2 more I don't see what's that difficult about doing it on your own. I see places like RIA in a box that charge like $5,000 to do it all, but it just seems fairly straightforward to me. Yes, definitely time consuming, but am I missing something on why people choose to have places like RIA in a box or some compliance agency do them? Is it just because people can't be bothered with the 80+ pages of documents?
- What are the main compliance issues I may face when starting a new RIA firm? Since I was previously an FA I know the importance of delivering brochures, statements, staying in line with objectives/risk profile of clients, but what else am I missing that could be a compliance issue? I figured if you had a good custodian they'd cover you with documents mostly, so what am I not taking into account that I may run into?
- I don't plan on having much in AUM at first, probably at most $5,000,000 within the first few months from friends, family and close associates over the years. Even though that's a lot of money as we all know in Investment Management that's a drop in the bucket and I'm worried there won't be any good custodians who will let me on their platform. Who are some of the better custodians for someone with between 2 and 5 million in AUM?
- Also, am I reading this right or no? But on the SEC/IARD website I'm pretty sure I saw that new IA firms don't pay anything at all when they are registering for the first time? I find that hard to believe, but I'm almost positive I saw that.
- What are some costs that I'm not taking into account that could come up down the line?
- This is probably better to ask a lawyer about, but I'll ask anyway. My business is set up as an LLC, however, from my understanding I could still be held liable for losses to clients despite it being an LLC. There was a guy awhile back who explained to me how I should try setting up an LP to be the registered agent of the LLC thus creating a barrier between the two that would protect me personally from any liability, damages, losses etc. Does anyone know if I've got that right?
- Don't think I'm forgetting anything major on what else to ask, but any general advice on what to expect or things I should keep in mind please let me know.
Thanks!
Submitted November 11, 2019 at 07:38PM by psr1029 https://ift.tt/33NZlYp
