In the registered investment advisor space, aggregators are companies that acquire smaller businesses and operate them with the end goal of generating a profit. For instance, an advisor might seek a partnership with an RIA aggregator if they’re ready to leave their broker-dealer behind but aren’t quite ready to run a standalone firm by themselves. There are a number of RIA aggregators that advisors might choose to work with, but some stand out from the crowd more than others.
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Understanding the RIA Aggregator Model
RIA aggregators are firms that buy existing practices outright or provide investment advisors who don’t want to operate standalone businesses with access to the necessary infrastructure and tech tools to serve their clients. Advisors who choose the latter are able to run their businesses under the aggregator’s brand without having to invest time, money and effort into starting a new firm from scratch.
Aggregators can offer advisors access to a wide variety of resources and tools to help them better serve their clients. That can span everything from trading and compliance to social media marketing and software solutions. Because all of these tools are made available through the aggregator, access to them is more cost-effective for advisors.
Depending on how the RIA aggregator is structured, advisors may be able to choose from different models for doing business. For instance, they may be given the opportunity to become a shareholder of the parent aggregator firm or simply join the aggregator’s network of advisors. Either one could be attractive for an advisor who may be in a transitory stage of their career and isn’t yet ready to take the leap with starting an independent firm of their own.
RIA Aggregators to Consider
The RIA aggregator industry has lots of players, but some have earned a better reputation than others. These companies represent some of the best options overall for advisors who are looking to enter into an aggregator relationship.
Dynasty Financial Partners
Dynasty Financial Partners is a wealth tech platform that serves both established RIAs and advisors who are interested in becoming independent. The company offers solutions in four key areas:
- Starting an RIA
- Growing an RIA
- Joining an RIA through a Dynasty Network advisory firm
- Selling an RIA or developing a succession plan
Advisors who are interested in becoming part of the Dynasty Network have the opportunity to leverage an established platform, allowing them to scale and grow while better serving their clients. Dynasty encourages advisors to schedule a discovery call to learn more about the platform’s approach and how it connects advisors with established RIAs.
Focus Financial Partners
Focus Financial Partners invests strategically in RIAs and works with its partners in several key areas, including capital growth, business planning and succession planning. Advisors who partner with Focus may be looking for ways to grow an existing business or break away from a larger firm.
Some of the areas Focus offers assistance with include:
- Recruiting talent
- Legal and regulatory compliance
- Firm strategy
- Marketing
- Operations and technology
Focus also works with advisors who may be ready to retire and leave their firms behind but need help with creating a workable succession plan. Interested advisors can schedule a call to discuss how Focus Financial Partners might be able to help them reach their goals.
Commonwealth
Commonwealth offers multiple solutions for advisors who want to grow their businesses or hand them off to the next generation. There are four affiliation models to choose from:
- Dual registration: This model allows advisors to conduct a commission-based business and a fee-based business simultaneously.
- IAR-only (Corporate RIA): This model allows advisors to conduct an exclusively fee-based business as an investment advisor representative of Commonwealth.
- Hybrid RIA: Advisors who choose this model can maintain a commission-based revenue stream under Commonwealth’s broker-dealer arrangement while conducting their own advisory business through an RIA.
- RIA-only (independent registered investment advisor): Commonwealth offers this option to advisors who want the experience of running their own RIA without the responsibilities or costs associated with maintaining their own infrastructure.
Advisors have flexibility, as they can choose to switch to a different affiliate model if the needs of their business change. Interested advisors can fill out the Contact form on the Commonwealth website or contact the development team by phone to discuss the different models.
LPL Financial
LPL Financial offers advisors independence on their terms along with personalized support and industry-leading technology. The company offers multiple business models, allowing advisors to choose a solution that best fits their career trajectory, goals and needs.
Some of the options offered include:
- Joining an existing practice
- Working as an independent advisor
- Becoming an employee advisor
- Selling a business
In terms of variety, LPL Financial’s solutions run the full gamut when it comes to different advisor scenarios. Advisors can submit their profiles online or search for an LPL Financial representative nearby to schedule a discovery meeting.
Hightower
Hightower is focused on growth and supports advisors in several key areas, including marketing, human resources, business consulting and regulatory compliance. Advisors can sell their business to Hightower, choose a partnership model or become part of the Hightower network.
Partners have access to a full suite of support services that are designed to make scaling an advisory business easier and less time-consuming. For example, if you need help developing social media marketing content that’s something Hightower’s team can assist with.
Whether Hightower is the best RIA aggregator for you can depend largely on what you’re hoping to accomplish in your business. Advisors are encouraged to schedule a call to learn more about how partnerships with Hightower work.
Bottom Line
Entering into a partnership with an RIA aggregator can yield benefits to advisors who, for whatever reason, are not interested in managing their own firms independently. When comparing RIA aggregators, it’s helpful to consider how the partnership model works, the features and tools that are available to advisors and what you can expect with regard to growing your business.
Tips for Growing Your Advisory Business
- SmartAsset AMP (Advisor Marketing Platform) is a holistic marketing service financial advisors can use for client lead generation and automated marketing. Sign up for a free demo to explore how SmartAsset AMP can help you expand your practice’s marketing operation. Get started today.
- Starting an RIA can be a time-consuming and potentially costly process, but it may be worth it if you’d like greater control over your career as an advisor. Understanding what’s needed, in terms of software, for example, for documentation, compliance and funding can help you to evaluate whether launching an RIA firm might be right for you.
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