Become A Registered Investment Advisor

A registered investment advisor competes against wire-houses, stock brokers, mutual funds, hedge funds and the do-it-yourself types to provide clients with investment advice and assistance. Privately owned RIA firms are an excellent place for personal financial advisors to begin or expand their careers, since the industry is rapidly growing. Many clients are making the switch from the old model of advisory services (which paid advisors by commission) to the new model, which pays a set rate/fee. Many individual investors report greater satisfaction with an RIA firm because they feel their interests are better valued.

A registered investment advisor works to sell investment products to clients to help them achieve predetermined, long-term goals. Different firms have different sales techniques, fee structures and business models, but these advisors will undoubtedly be skilled in sales and customer service to stay successful. Lastly, an RIA attends training courses, seminars and conferences to network with other advisory professionals and learn all about new product offerings. Many people like working with a financial advisor because they don’t have the time or knowledge to manage their own assets but they enjoy having a trusted friend managing for them.

More and more Americans are moving away from wire-houses to independent financial advisors, according to a June 2009 TD Ameritrade survey of registered and independent investment advisor professionals. Over 80% of RIAs surveyed reported an increased influx of clients over the last six months. The top three reasons why new clients transferred to the RIA advisory services include dissatisfaction with service, advice performance or fees at full-service brokerage firms (34%); to receive better advice that is in their best interest, rather than the broker’s best interest (21%); or to receive more personalized service with a more competitive fee structure (17%).

The future of the registered investment advisor looks bright. In the coming years, RIAs are looking to cut major business expenses (like travel and marketing costs) to offer more competitive fees. Yet some RIAs will invest in technology to offer more innovative services to their clients. In the next year, RIAs plan to increase revenue by forming alliances with other financial professionals like CPAs and attorneys, recruit new talent, add retirement/estate/insurance/tax and college planning services, explore merger and acquisition opportunities, and specialize in new market segments like business owners, baby boomers and women.

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