October 10, 2011

Pershing Offers New Guidance to Breakaway Advisors Launching an RIA


JERSEY CITY, N.J., October 10, 2011 — Pershing Advisor Solutions LLC, a BNY Mellon company, announced today the availability of a new independent study, Destination RIA: What to Expect and How to Prepare. The research provides wirehouse advisors with a thorough review of independent registered investment advisor (RIA) models and sets expectations for the different challenges and experiences of working as an RIA.

"The RIA model has continued to grow rapidly as wirehouse advisors seek the freedom to run their businesses in a manner which best enables them to meet their clients' needs," said Kim Dellarocca, head of practice management at Pershing, "the study provides assistance for determining whether such a move is right for an advisor and, if so, how to make a successful transition. Pershing is uniquely positioned to provide a spectrum of choices to independent RIAs based on the distinctive needs of each advisor."

"Success with an RIA comes in many forms -- personal and professional growth, doing what is best for clients, building value in a business, and economic reward represent just a few of the many opportunities an RIA presents. Success, however, is predicated on the wirehouse advisor being properly prepared for the trip," said Dan Inveen, Principal, FA Insight.

Highlights of Destination RIA: What to Expect and How to Prepare include:

  • Benefits of the Independent Model – The industry is in the midst of an ongoing shift out of wirehouse firms and toward more independent affiliation models. Industry turmoil, the mergers of major firms, regulatory pressure, and investor trends are driving the shift toward greater fiduciary responsibility and increased transparency with wealth management. The study underscores investors' growing preference to work with independent advisors who are paid by their clients for fiduciary advice; not for selling products. Advisors in the study regularly cite the ability to put their clients' needs first as a key driver behind their decision to go independent.
  • What it Takes to Succeed – There is no singular path to independence. Advisors have many options including: to start an RIA, to join an RIA, to join an independent broker-dealer, or to start a broker-dealer or affiliate with a strategic acquirer. Advisors will assume new responsibilities as they transition from employee to owner, manager and leader. As a firm owner, the owner-advisor assumes a host of responsibilities beyond just providing advice to clients. The study provides detailed explanation of how principals can navigate these new challenges.
  • Ensuring a Successful Transition -- Although the benefits of the independent model are enticing, not every wirehouse advisor should embark on the transition. Some do not have the prerequisite personality traits and practice characteristics to succeed. Personal preferences may be an obstacle as well when it comes to a preference for running a business versus simply servicing clients. The study details the characteristics of successful advisors and provides a comprehensive decision matrix to help advisors understand the choices.
  • Planning the Transition – Advisors should consider working with a transition consultant to develop a business plan with a detailed timeline and project plan that can provide a critical road map for guiding them through the transition. The study educates advisors on the planning and protocol, legal and insurance factors that need to be taken into account when considering such a move.  

The study complements An Advisor's Guide to Establishing an Independent Practice, previously released by Pershing. The earlier study provides a comprehensive implementation framework for setting up an independent RIA firm and includes decision-making support on topics such as compliance, technology, operations, office space and staffing. For the new study, the emphasis is on raising the wirehouse advisor's comfort level with the decision by providing a step by step process and real world examples to illustrate successful strategies for making the transition to independence.

Pershing Advisor Solutions LLC (member FINRA/SIPC) is an affiliate of Pershing LLC and a leading custodian to independent registered investment advisors and dually registered advisors working in conjunction with many of Pershing LLC's introducing broker-dealer customers. Pershing LLC (member FINRA/NYSE/SIPC), a BNY Mellon company, is committed to delivering dependable operational support, robust trading services, flexible technology, an expansive array of investment solutions, practice management support and service excellence. Through an innovative custody platform, Pershing Advisor Solutions delivers superior expertise and scalable and customizable solutions to help independent registered investment advisors manage and grow their businesses. Additional information is available at www.pershingadvisorsolutions.com.

Pershing LLC (member FINRA/NYSE/SIPC) is a leading global provider of financial business solutions to more than 1,500 institutional and retail financial organizations and independent registered investment advisors who collectively represent more than five million active investors. Located in 21 offices worldwide, Pershing and its affiliates are committed to delivering dependable operational support, robust trading services, flexible technology, an expansive array of investment solutions, practice management support and service excellence. Pershing is a member of every major U.S. securities exchange and its international affiliates are members of the Deutsche Boerse, the Irish Stock Exchange and the London Stock Exchange. Pershing LLC is a BNY Mellon company. Additional information is available at www.pershing.com.

BNY Mellon is a global financial services company focused on helping clients manage and service their financial assets, operating in 36 countries and serving more than 100 markets.  BNY Mellon is a leading provider of financial services for institutions, corporations and high-net-worth individuals, offering superior investment management and investment services through a worldwide client-focused team.  It has $26.3 trillion in assets under custody and administration and $1.3 trillion in assets under management, services $11.8 trillion in outstanding debt and processes global payments averaging $1.7 trillion per day.  BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation (NYSE: BK).  Additional information is available at www.bnymellon.com and through Twitter @bnymellon.