- Profitable independent RIAs require scale: Independent RIAs can achieve profitable scale once they have more than $200 million in assets under management, assuming business operations and expenses are managed efficiently. The tipping point could be even higher for advisors who lack expertise in business process and technology.
- Revenue generation at corporate RIAs is comparable to that of independent RIAs: Revenues for advisors with a corporate RIA averaged $1.2 million vs. $1.3 million with an independent RIA.
- Advisor income favors corporate RIAs for the majority of practices: When comparing annual income, advisors with a corporate RIA earn more on their books of business, particularly those with a book over $100 million but less than $1 billion.
- Nonfinancial costs of independence: Compared with corporate RIAs, independent RIAs spend more time – and more resources – on compliance, technology and other operational aspects of the business. Advisors who must also focus on these aspects sacrifice time they could spend on prospecting and sales.
NFP Advisor Services Group Publishes Aite Study On The Key Factors In The Independent Or Corporate RIA Decision For Advisors
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