Series 65- What Are the Ongoing Expenses for an IAR ?

[pfg1]

Hello,

I have talked to a few RIA's and am trying to find out what the ongoing expenses and breakdown of those should be ?

One RIA told me E & 0 can be obtained from NAPA for around $73 a month for an IAR/RIA.

There is also the state registration fees. Not sure what these are approximately.

One RIA told me that about $250 a month covers their "services".

Which are:

* Holistic financial planning process
* Support from an experienced financial planning team
* Back office operational support
* Compliance oversight
* Access to several 3rd party money managers
* Marketing support

I think one RIA said a person can be a "solicitor" only with them. The ongoing cost would only be state registration fees. Of course this was more limited role. Basically it sounded like a referring over people arrangement.

Thanks!

Who did you end up going with for your RIA? Or what did you decide?

 

[CALTCAgent]

Who did you end up going with for your RIA? Or what did you decide?

I haven't decided yet. I have talked to a few so far. Some with more fees some with less. Of course the high fees promise great software and support as the main attraction.

 

[ktmorgan]

It really depends on what your plans as are an IAR. Do you want to build your own book to build up AUM fees? It takes a lot of AUM to get up to a living wage after splits w/RIA and other IAR expenses and client acquisition costs. My E&O for Life, FIA & IAR is $2700/yr w/ a clean U-4. But I have a ton of other expenses too.

Or do you just want to remain complaint w/DOL as an Insurance producer so you can deal with IRA's? If so find a TAMP to partner with. Drew Hortor is pretty damn good at it. But there are many others too. He's just really good for Insurance producers because he gets Insurance. I also like Jason Wenk a lot.

The vast majority of RIA's don't understand Insurance at all and barely even acknowledge it's existence. Virtually none of them understand "Insurance as an Asset Class," because they all came from the NASD/FINRA world so different regulators and different training in the biz. They all think insurance is merely Term, Variable Annuity or maybe VUL.

None of them believe that a properly structured CV life policy can/will beat "buy term invest the rest." I once tried to explain a WL policy w/a Paid up additions Rider Blended w/some Term to bring down the DEFRA corridor to a RIA and he looked at me like I was speaking Eskimo or something. Then he said that was against the law.

Or do you plan on starting your own RIA in the future? It can either very cheap(RIA in a Box), but you get what you pay for there. Or it can be more expensive and you still get what you pay for and your expenses go way up.

But either way remember RIA's under major attack from the TD's, Schwab's, Vanguard's, Fidelity's of the world as they are hiring a ton of newly minted CFP's and are setting up to be very serious direct competitors to whom they claim are their partners, the RIA's.

And being a small RIA is extremely tough as M&A in the space is hot and heavy right now. The big are getting bigger and the small are going out of biz.

So you gots to figure out what you want to do.

You might want to see if you can find a cool older person with whom you get along well, who already has a big book and partner with them and do your own thing with them. Learn the RIA biz and bring them along slowly with Insurance and then combine all of that and take over their book and offer the the full meal deal.


KTM CLU, ChFC CFP® (Candidate), IAR

I haven't decided yet. I have talked to a few so far. Some with more fees some with less. Of course the high fees promise great software and support as the main attraction.

----------

I just noticed that you're in Cali. If you want to talk just IM me.

Best,
KTM

I haven't decided yet. I have talked to a few so far. Some with more fees some with less. Of course the high fees promise great software and support as the main attraction.

 

[CALTCAgent]

Or do you just want to remain complaint w/DOL as an Insurance producer so you can deal with IRA's? If so find a TAMP to partner with. Drew Hortor is pretty damn good at it. But there are many others too. He's just really good for Insurance producers because he gets Insurance. I also like Jason Wenk a lot.

I thought Horter had high ongoing expenses to the RIA. I could be wrong though.

The vast majority of RIA's don't understand Insurance at all and barely even acknowledge it's existence. Virtually none of them understand "Insurance as an Asset Class," because they all came from the NASD/FINRA world so different regulators and different training in the biz. They all think insurance is merely Term, Variable Annuity or maybe VUL.

None of them believe that a properly structured CV life policy can/will beat "buy term invest the rest." I once tried to explain a WL policy w/a Paid up additions Rider Blended w/some Term to bring down the DEFRA corridor to a RIA and he looked at me like I was speaking Eskimo or something. Then he said that was against the law.

Is it important for the RIA to understand insurance ?

I mean does that help them help us in some way through their presentation software or something ?

Otherwise we already understand it and have FMO's in place. Maybe I am missing something ?

Or do you plan on starting your own RIA in the future? It can either very cheap(RIA in a Box), but you get what you pay for there. Or it can be more expensive and you still get what you pay for and your expenses go way up.

But either way remember RIA's under major attack from the TD's, Schwab's, Vanguard's, Fidelity's of the world as they are hiring a ton of newly minted CFP's and are setting up to be very serious direct competitors to whom they claim are their partners, the RIA's.

And being a small RIA is extremely tough as M&A in the space is hot and heavy right now. The big are getting bigger and the small are going out of biz.

So you gots to figure out what you want to do.

You bring up good points about deciding what you want to do. I find it hard to figure out what you want to do with no experience in that field. I feel experiencing things first can help decide what direction to go. Therefore keeping ongoing fees low at first sounds appealing.

You might want to see if you can find a cool older person with whom you get along well, who already has a big book and partner with them and do your own thing with them. Learn the RIA biz and bring them along slowly with Insurance and then combine all of that and take over their book and offer the the full meal deal.

You mention "an older person", do you mean when they retire I would take over their RIA book of business ?

 

[ktmorgan]

It would be easier to talk then trying to type out answers to the many unknowns that you naturally have. Not all RIA's have to same business model. My answer to your questions would depend on the particular business model of the RIA you are considering joining...or creating.

Email me at my junk folder and we can set up a time to talk. Then you can report your thoughts back here for the benefit of others if you choose to. "[email protected]

Best Regards,
KTM

I thought Horter had high ongoing expenses to the RIA. I could be wrong though.



Is it important for the RIA to understand insurance ?

I mean does that help them help us in some way through their presentation software or something ?

Otherwise we already understand it and have FMO's in place. Maybe I am missing something ?



You bring up good points about deciding what you want to do. I find it hard to figure out what you want to do with no experience in that field. I feel experiencing things first can help decide what direction to go. Therefore keeping ongoing fees low at first sounds appealing.



You mention "an older person", do you mean when they retire I would take over their RIA book of business ?