Unveiling the Untold Secret: The Trend of Independent RIA Firms Surrendering Control of Their Destiny

For the last 15-20 years, the financial industry has seen a growing trend of advisors embracing the fiduciary mindset and running fee-based businesses, allowing them complete control over their operations, investments, client experience, and more. However, a new development has recently emerged that challenges this traditional path.

Telling the Untold Secret

The M&A landscape has experienced significant activity, with lending and private equity players entering the picture and creating super RIA structures. At the same time, larger firms are enticing and recruiting advisors with financial incentives to join their ranks, often accompanied by multiyear lock-ins. The allure may be the prospect of enhanced capacity and resources, but it raises important questions about fiduciary responsibility and client disclosures.

As an RIA or IAR, is taking money to move your business the right thing to do? Do you disclose this to your clients? What is the reason an advisor would accept this?  Is a potential breach of fiduciary duty worth the risk?  U.S. law and standards of professional conduct oblige fiduciaries to exercise a high standard of care, loyalty, and honesty in providing services to their clients and stakeholders. The fiduciary duty of an RIA or IAR is a solemn obligation that requires prioritizing the client’s interests over their own. 

The Securities and Exchange Commission (SEC) has taken notice of this trend and is investigating the validity and disclosures of such business practices. As the regulatory landscape evolves, evaluating the ethical implications of accepting financial incentives to move becomes crucial while upholding the fiduciary commitment to exercise loyalty and honesty in providing services.  

One of the core reasons FocusPoint Solutions formed more than 20 years ago is to help advisory firms keep control over their practice, provide support, and preserve their unique brand. With the FocusPoint team supporting them, our advisors can maintain their own culture and create their own destinies.

FocusPoint Solutions empowers advisory firms, allowing them to retain ownership of their technology, data, and, most importantly, their client relationships. We provide comprehensive support by outsourcing non-revenue producing aspects such as back-office operations, middle-office support, trading, reporting, and billing. 

However, our commitment continues beyond there. Another core function of our company is that we invest in helping advisors grow their practices as an ongoing part of our relationship. Our team works alongside advisors, offering expertise in executing marketing and sales strategies, leveraging technology, building strong brands, facilitating succession planning, navigating M&A opportunities, managing human capital, and more. We are your dedicated partners on the entire journey to sustainable growth.

If you are an advisor who values maintaining control over your business and desires to continue or initiate your firm’s growth, we would be thrilled to connect with you. Let’s talk about how FocusPoint Solutions can support you in achieving your goals while upholding your fiduciary responsibilities and delivering exceptional client experiences.

To take the next step, email us or call us at (866) 201-3034. We look forward to connecting, learning about your unique situation, and exploring the possibilities together.

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