DISCOVERING TRUE INDEPENDENCE AS AN RIA

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1 DISCOVERING TRUE INDEPENDENCE AS AN RIA You ll find the complete control and freedom you re looking for at Raymond James without giving up any of the support you need to succeed.

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3 BECOMING A REGISTERED INVESTMENT ADVISOR INDEPENDENCE YOUR WAY As a successful financial advisor, owning a registered investment advisor (RIA) firm means true autonomy for you and your clients. It reduces conflicts of interest between you, your clients and a broker/dealer affiliation and may come with significant personal and financial rewards. An independent fee-based practice offers the opportunity to serve clients the way you see fit, without restrictions. It s entirely your show: You build the equity and reap up to 100% of the advisory fee. For many, that s exactly how they would like to run their business. But it may not be the right choice for everyone. Careful examination will give you a good indication of whether the move makes sense for the future of your practice. Of course, an effective and smooth transition takes planning, backed by the right support. it s not just about custodial and clearing services. You ll also want robust resources, turnkey solutions, integrated technology and a dedicated transition team. A comprehensive platform, quality research, practice management and marketing strategies should be available to complement your expertise. You need the right tools to build a strong practice and the independence to make your own decisions just the right combination to make a meaningful difference in your clients lives. Good leaders need the right tools to build a strong practice and the independence to make their own decisions Raymond James provides just such freedoms. Raymond James believes that advisors know how best to serve their clients. So we offer the tools, research and resources you need to serve your clients fully and freely. By offering a broad range of services, the firm gives advisors the solutions necessary to build and sustain long-term client relationships, while growing their practices. Deciding to transition to a fee-only practice does take a lot of forethought and planning, but we assure you it s worth it. 1

4 HERE S HOW TO GET STARTED 2

5 BECOMING A REGISTERED INVESTMENT ADVISOR 1 DECIDE IF YOU ARE READY 2 ASK MANY QUESTIONS 3 SELECT A CUSTODIAN 4 ADDRESS LEGAL ISSUES 5 PARTNER UP OR GO SOLO 6 BUDGET FOR THE TRANSITION Examine your practice and emotional readiness to take your business in a new direction. For some, becoming an independent entrepreneur is the opportunity of a lifetime; for others, changing the way they do business may seem daunting. Look at your business: Are you mostly advisory fee-based? If so, a move to a fee-only platform might be a great option for your practice. There s no better resource than former colleagues and peers who ve already made the move to independence. Learn from their experiences by asking questions and listening to their stories. Members of professional organizations, such as the Financial Planning Association and Investment Management Consultants Association, may also have personal stories and insights about going independent. Choosing a custodian is of utmost importance. Your custodian provides much-needed support to help you transition and build your practice access to managers, investment software, quality service, performance systems, operations and marketing, among others. Your custodian should inspire confidence because you ll need to show your clients that the move was in both your interests. For example, if you work for a wirehouse with a reputation for respected research, your clients will want to know that your new firm is capable of providing even more than your previous firm. The transition comes with legal obligations both to your current firm and your new one. It s a good idea to consult with an experienced attorney and with your selected custodian for advice on existing agreements and obligations, maintaining your licenses, new agreements with clients, and filing as a new RIA (Form ADV). The decision is yours. Do you want to start your own business or join an existing RIA? The decision should be based on financial considerations, personal goals and partnering chemistry. A partner will share the responsibilities of setting up an office and operating a business. On the other hand, going solo gives you more control and equity. Keep in mind that your income may temporarily decline as you set up your new practice and convert clients to a fee-based relationship. But it s only temporary while you prepare for an even more rewarding future. Advisors who ve gone through this down phase know it s the price they had to pay to build the business they wanted. Of course, as a full-service custodian we ll help you plan your transition budget and perhaps be able to offer financial assistance in certain circumstances. 3

6 7 CHOOSE YOUR TEAM 8 CONVERT YOUR CLIENTS 9 CONCENTRATE ON COMPLIANCE 10 MARKET YOUR NEW PRACTICE 11 ESTABLISH A HYBRID OPTION Your support team will help you deliver the superior service your fee-based clients expect. It s important to have a game plan in place to quickly hire and train the people you need to be successful, especially if your current staff doesn t make the move with you. Converting clients to your new practice might seem intimidating at first, even if you re convinced that a fee arrangement is in their best interest. But it may actually be easier than you think; a well-thought-out, clear discussion is usually all it takes to convince them. However, if you choose to build a hybrid RIA practice, your clients may still work with you on a commission basis and then slowly transition to a fee-based arrangement. As the principal in an independent RIA firm, you re ultimately responsible for compliance. Start on the right foot by establishing high compliance standards and procedures with support from your new custodian. You should engage a compliance consultant to help develop written procedures and policies, as well as to help keep you informed on changing rules and regulations. You will also want to engage an attorney to file your ADV regulations, handle your contract, etc. We can provide you with a list of thirdparty experts to advise you on compliance, legal, benefits, real estate, insurance and other critical needs. Your clients expect the best. These days, prospective and existing clients alike consider a website, a newsletter and a brochure explaining your practice standard collateral. if you re in a client-acquisition phase, you might need additional tools, such as seminars, article reprints, and online and direct marketing collateral. Marketing is crucial to attracting and retaining clients. A thorough, thoughtful marketing plan can help you manage and grow your practice. Develop a marketing plan early. Even as a fee-based, independent RIA, you may decide to keep your Series 7 with a broker/dealer to do commission-based business for some of your clients. We can refer you to third-party broker/dealers our RIAs have worked with in the past to support you in this option. 4

7 BECOMING A REGISTERED INVESTMENT ADVISOR For some, becoming an independent entrepreneur is the opportunity of a lifetime. 5

8 We thoroughly researched our move and were drawn to the high integrity of Raymond James. We were impressed by the management, corporate culture and client focus. STUART GREENFIELD AND YANCEY SEITZ Greenfield Seitz Capital Management Dallas, Texas Raymond James Independent RIA since 2009; $340 million in assets under management, as of July

9 BECOMING A REGISTERED INVESTMENT ADVISOR GREENFIELD SEITZ CAPITAL MANAGEMENT A DIFFERENT WORLD BECOMING AN RIA HELPED THIS TEAM TAP INTO THE INSTITUTIONAL MARKET. For Yancey Seitz, the independent, entrepreneurial spirit was always in her blood. Her grandfather owned a paint company that eventually went public, and her father ran his own brokerage firm. Her mentor, Eric Greenfield, was a financial advisor and developed his own process for research and stock selection. They worked together at a major wirehouse for a decade before becoming partners in But the confines of the wirehouse left them disenchanted. However, it wasn t until Eric s son Stuart joined the group that they began investigating options for independence, beginning with Raymond James and two other firms. Ultimately, they were drawn to Raymond James client-first focus, commitment to their business and the ability to choose from five different affiliation options. n fact, they originally started at a Raymond James & Associates branch office then moved into the RIA business model to service institutional clients. Since moving to this business model, this team of two advisors has experienced significant growth; bringing in $130 million from two large pension funds. They also valued the firm s risk aversion and safety of assets. But the most important factor was the firm s culture of always putting the client first. As an independent RIA, they have the freedom to focus on researching stock investments and serving clients. That research paid off for investors as they outperformed the S&P 500 Index for eleven consecutive years from Although the transition was stressful, they re glad they did it. Everyone involved in the transition process was very detail-oriented like we are, Yancey says. So many people at Raymond James were willing to help us in whatever way necessary. 6 We found the same thing here that we look for in our stocks, Yancey says. The right people are running the company. We felt an instant connection. The move made sense for their clients, too. After joining Raymond James, both partners talked to their clients about the unparalleled support they received, and their clients reacted positively. So much so, they all made the transition, too, even after being heavily wooed to stay at the wirehouse. Plus, Yancey and Stuart explained other benefits, like the award-winning equity research department, autonomy and a safer custodian. Becoming an RIA was a wonderful move for us. We love the freedom we have now, Yancey says. We can spend more time on research and making the best decisions for our clients. That dedication has paid off in other ways, as well. For example, PSN Informa recently named Greenfield Seitz Capital Management Manager of the Decade for the second time out of more than 4,000 funds. Lipper Marketplace recognized them for best 10-year returns, out of more than 3,000 equity managers. 9

10 JOBES SOLO INVESTMENT GROUP THE RIGHT FIT EXPERIENCED ADVISORS FINALLY FIND TRUE INDEPENDENCE. Like legendary investor Benjamin Graham, Jon Solo and Ken Jobes believe investing is not just about return, it s also about actively managing risk. The two met at RBC Ken, the lifelong advisor, and Jon, a relatively new advisor whose previous career as a consultant and business owner combined risk management with a hardy entrepreneurial spirit. They both approached wealth management the same way, but quickly realized their philosophy didn t fit in with the firm s buy-and-hold culture. They felt the big firms were just looking for salespeople, which was not the value they wanted to bring to their clients. Clearly, it was time for a change. They launched their partnership in 2009, transitioning to Raymond James a year later after researching other firms. Sarah Wiggins, their administrative manager, transitioned with them after holding management positions at RBC. It became obvious that owning their own business with support from Raymond James was the only choice for them. Raymond James was head and shoulders above the competition, Jon says. They re a can-do firm whose sole focus is wealth management. They really treat their advisors like clients. From the time they visited Raymond James, they knew the firm s culture would be a good fit, but they weren t sure how their clients would react to the change. So, the team took the time to really explain how being independent would remove potential conflicts of interest, and their clients liked the idea of a more transparent relationship. We told our clients that our bottom line depends on their success; that we were on the same playing field, Ken says. Our clients were very receptive to the benefits of independence for our firm. We were pleasantly surprised. The ongoing support and exceptional transition team made the move even easier. Every time they called for assistance, the team at Raymond James bent over backward to help. In fact, Ken still feels like he can call Chairman Tom James and talk about anything, once even suggesting a promising young artist. Tom s response? A heartfelt thanks and an invitation to lunch. That level of interaction with senior management can be hard to find at the major wirehouses, if not downright impossible. And it s one reason Ken and Jon are so glad they overcame their concerns and made the transition. Jon only wishes they had done it sooner. 6 Raymond James doesn t just say, No to advisors requests. They say, Let s think about it and see what we can do. They re a can-do firm whose sole focus is wealth management. They really treat their advisors like clients. I tell other advisors to get over their fears and just do it already, laughs Jon. Of course preparation and due diligence are key to get through the six months it takes to make the move. But then it s over and it s so worth it. You can t put a price on the value of owning your own business. 6

11 BECOMING A REGISTERED INVESTMENT ADVISOR With Raymond James, we re truly tactical money managers. We can maintain our focus on risk management and spend time where we believe it s most valuable. KEN JOBES, JON SOLO AND SARAH WIGGINS Jobes Solo Investment Group Houston, Texas Raymond James Independent RIA since 2010; $70 million in assets under management, as of July

12 ROSEMAN WAGNER WEALTH MANAGEMENT A MATTER OF TRUST RAYMOND JAMES STOOD ABOVE THE REST WITH AN UNTARNISHED REPUTATION. Scott and Aaron both started their financial planning careers right out of college working for separate major wirehouse firms. A chance encounter at a family gathering uncovered their mutual interests in the securities business. They soon established the Roseman Wagner Group at a large wirehouse, later becoming brothers-in-law when Aaron married into the family. As their partnership materialized and assets under management grew, they quickly became disenchanted with the bureaucracy at Citi Smith Barney. They spent a year diligently considering their transition options with several custodians, including Raymond James. In September 2008, Roseman Wagner Wealth Management opened its doors. They chose Raymond James as their custodian, in part, because of its upstanding reputation. Raymond James did not partake in the bad behaviors that were so common within the major wirehouse firms at the time, Scott says. That was very important to us. To be frank, it was refreshing to find a firm that chose not to partake in the contagious behaviors that corrupted so many Wall Street firms. Of course, other factors came into play, as well. The duo really appreciated the opportunity to explore different business platforms within a single firm in order to find the right fit for them. They ultimately chose the registered investment advisor model after comparing the pros and cons of each of the different platforms that Raymond James offers. At one time, they were concerned about how their clients would perceive the change to an independent RIA practice with a new custodian. But that concern quickly melted away. Our clients were not concerned with what platform or custodian we used, Aaron says. Our clients trusted our judgment. 6 We really appreciated the opportunity to explore different business models in order to find the right fit for us. Practicing as an RIA allows us the freedom to think and act independently from the standard fast-paced Wall Street mindset, Scott says. We enjoy the benefits of owning our business and the freedom to make our own decisions. This certainly was the right choice for us. Like others who ve made the transition before them, their only regret is that they wish they had made the decision to start their own practice sooner. 10

13 The biggest surprise was there were no surprises to speak of. We spent many sleepless nights worrying about all the possibilities of what could go wrong, and none of them came true. SCOTT ROSEMAN AND AARON WAGNER Roseman Wagner Wealth Management Loomis, California Raymond James Independent RIA since 2008; $195 million in assets under management, as of July

14 DISCOVER THE ROBUST RESOURCES AND PERSONAL ATTENTION WE OFFER INDEPENDENT RIAS. Your expertise is a powerful thing it s why clients choose to work with you, and it s what makes you capable of running a successful independent RIA. At Raymond James, we recognize that. And we re here to complement your expertise and support your practice with the resources you need to run your own show. With highly regarded research, integrated technology and personalized attention, Raymond James can help you discover true autonomy. To learn more about the possibility of a future as an independent RIA, call or visit ADVISORCHOICE.COM/RIA 12

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16 INTERNATIONAL HEADQUARTERS: THE RAYMOND JAMES FINANCIAL CENTER 880 CARILLON PARKWAY // ST. PETERSBURG, FL // ADVISORCHOICE.COM/RIA NOT FOR CLIENT USE 2013 Raymond James & Associates, Inc., member New York Stock Exchange/SIPC 2013 Raymond James Financial Services, Inc., member FINRA/SIPC Raymond James is a registered trademark of Raymond James Financial, Inc., 13-IAD-0189 BS 7/13