Just kidding.  I have been in the industry since 2000.  Most recently, I have been in a warehouse gig for the past four years (7/66).  It hasn't been the greatest experience, but to be fair, I have learned a lot that I do not know that I would have any where else.  I am exploring my options right now.  I have a pretty extensive trading and portfolio management background.  I traded over $100 million, mostly in equities, before I started as an advisor.  So I am pretty knowledgable about various trading platforms and portfolio management.  I am doing my research on RIA and hybrid models.  If anyone would like to give me some free advice, my ears are open.  My existing business model is fee based portfolio management.  I enjoy all aspects of it, so I am looking for a place to land that will translate well with my business model.  My portfolios are scalable and easy to replicate, and they 100% belong to me. One of my biggest 'must haves' is the ability to rebalance/trade all of my clients portfolios seamlessly.  

Thank you in advance for your insights, and I look forward to hearing back from you!

Why is the Wire "Not the greatest experience"

If you are expecting a true 80%-92% revenue you may be surprised that equity trading business and fee business at RIA/Hybrid can be much lower if you are active and dependent on platform fees, rent, assistant expense, BS line items for compliance, etc etc

They are great for Non Traded Reit/ VA / C Share business, but I have found its SHITTY for managing portfolios with discretion and a fee.

B / B+.  

Hedge funds have a high start up cost and it sounds like you are working with individual investors - so probably doesn't make sense.

I am too active (mainly stocks) to absorb ticket charges and I do not want to pass that on to the client. At the Wires there are no ticket charges and no flat .20bs platform fee that I now pay making my margins very similar in either Hybrid RIA or Wire. 

Be aware of it,

Which is why I am out. F Pershing.

Chief will mention something about them having a prop desk.

If a client goes to TDAmeritrade, or Fidelity, they are going to pay say, 9.99 a trade. And they can trade to their hearts content. On their own.

If they come to you, they are still paying 9.99 a trade Thats for the trade. Then they pay 1% or whatever, of assets to you. Thats for advice you fucking numnut. So they dont blow themselves up. You do think you're advice is worth 1%, don't you? 

Welcome to AH. And no, I'm not trying to be combative. 

It looks like your skin is so not thick enough that its made out of fucking Charmin. Was it the numnuts comment that made you go all Helado on me? Because that, and every other sarcastic part of my post was meant to be funny, not to rip you. I was actually trying to give you an explanation of why the ticket charges made sense, to help you. '

So go fuck yourself, cunt. I've been around here too long to take sandy vaginas like you seriously. 

Edit: Oh, and go take a course on how to interpret emoticons, Edith 

Okay fuckstick, it's apparent to me that you need to learn the rules.

First, of the forum.  You are new here.  You haven't earned the right to be an asshole yet.  So you either get your shit together and respect your elders (and in this case, VERY elder), or you hop back onto what shitwagon you rolled in on, and good luck getting help with your situation somewhere else on the internet.  

Second, on your question.  You got the right advice, but failed to listen because you are a twat.  As an RIA, you will be a fiduciary when working with clients.  You will likely not have custody of your client funds, so you will have to pick a firm to handle that for you.  The main players are the discount brokers, plus Pershing.  They don't do this for free.  They make their money by doing trades.  $10 a trade.  You get the point.  They also do this through revenue sharing with fund and ETF companies through their "No Transaction Fee" or NTF programs.  Essentially, the fund/ETF company agrees to kick some revenue back to the custodian (Fidelity, Pershing, whoever) in exchange for the custodian not charging fees for clients (or advisors) to trade/hold those funds there.  Usually this means the custodian gets a 12b-1 fee of 25 bps, but that's not always the case (obviously with ETF providers that isn't the case). 

The custodians will also negotiate an asset based fee with RIAs for unlimited trading (i.e. every account can trade free on an unlimited basis, in exchange for say, 20 basis points annually of the AUM they custody).  20 basis points is .20% in case you're slow (which you clearly are).  

So if you are going to do the AUM fee arrangement, it's easy.  No conflicts of interest.  Trade, don't trade.  Stocks, bonds, ETFs, mutual funds, whatever.  You know you're giving Fidelity 20 bps a year no matter what, so you build that into your fee structure.  Say you charge 1.20%, Fidelity bills .2% for themselves, and sends you the other 1.00%.  

Now, what if you are doing the "ticket charge" thing?  SOMEONE has to pay $10 for every trade.  So as an RIA you can absorb it, or you can just have it bill to your clients separately.  So you may say "well duh, I'll charge 1.2% an absorb these charges for my clients, and I should still net 1.0%"  

Sounds great, until you look at the regulatory perspective.  What happens when your accounts are down 20% and a client finds out that you pay these trading costs on their behalf?  What if they decide to allege that you didn't move their money around because it would cost YOU money?  

That is bad.  That leaves you open to liability, even if it's not true.  So what do you do?  YOU aren't charging for trades (you aren't allowed after all, you're not a broker, you're just an advisor).  YOU are charging for your ADVICE, and FIDELITY is charging for TRADES.  So instead of billing 1.20% and covering the Fidelity trading costs out of your pocket, you charge say, 1.00% for your ADVICE and the client pays fidelity for their TRANSACTION costs separately.  

Make sense?  I don't care if it does or not, I'm just telling you how it is.  If you're smart, you'll STFU and listen to me because I'm a fucking genius.  But you aren't, so you'll probably ignore this sage advice and focus on the fact that I called you a shitstick (or fuckstick, whatever).  

But that would be unwise.  Because if financial advisors were cartoons, I'm G.I. Joe or maybe even Transformers, and at this point, you are My Little Pony.  

So get your shit together, learn your place, and MAYBE, just MAYBE we'll let you stay here and get an education about this industry that doesn't exist anywhere else in the industry, including the training programs at the biggest firms on Wall Street.

You're welcome.  

Moral of the story - don't piss off SportsFreakowitz! 

#1:  It has NOTHING to do with what you tell the client.  It has to do with your liability if a client makes the allegation.  And you would have almost no way to prove that you weren't cutting corners on trade volume in order to pad your checkbook, and that you didn't trade just because it wasn't part of your strategy.  

#2:  You keep calling it a commission.  It's not a commission.  It's a fee from the custodian for a service.  Most custodians charge a few bucks a year for an IRA fee (so do all the major full service broker/dealers, and fund companies).  Many charge a fee for paper statements or confirmations.  Some charge for checking.  Some charge to close an account.  The "per trade" fee (what we call a ticket charge) is NOTHING ELSE than an administrative fee from your custodian for processing a CUSTODY task (executing a trade, providing a tax form, sending a statement, etc.).

It is not a commission and has nothing to do with the advisor.  

This whole idea of separating it is basic, basic compliance advice on the RIA side.  It's not a thing that is up for debate.  You just don't understand (yet).  

Example 2:  You hold a 12 fund portfolio of ETFs for your clients in a 50/50 allocation.  The market tanks 2 years from now and your clients are down anywhere from 10 - 25%.  One of your clients goes to see an attorney because he is pissed that he lost money (yes, this happens ALL the time).  That attorney sees that you pay these costs for you clients, and decide to allege that you STUBBORNLY held those same ETFs, even though the market was tanking, and you should've known better and "gotten your client off the tracks" before it bottomed out.  How do you defend that?  

Example 3: You hold PIMCO Total Return fund for your clients.  The fund has been lagging the benchmark for about a year now.  You continue to hold it because Bill Gross is the bond king, active management usually wins with fixed income, and you aren't ready to give the fund the boot quite yet.  However, 2 more years go by, and Bill Gross continues to lag the benchmark by 1% annually.  You now have lots of clients that have lagged a simple bond index by 1% a year for 3 years, AND the MAJORITY of PIMCO Total Return's peer funds have not only beaten it, but beaten the index as well.  Your client then goes to an attorney, and they allege that you didn't want to dump the fund even though it lagged, and lagged, and lagged because YOU didn't want to eat the transaction costs.  

These 3 scenarios all get worse if that attorney puts an ad in your local newspaper asking your clients to contact him/her regarding a lawsuit about you taking advantage of them for your own paycheck.

In every scenario above, you have no defense.  However, if the CLIENT pays the cost of the transaction, you have absolutely ZERO conflict of interest when it comes to what fund to hold.  You can say "buying this fund over that fund, or this ETF over that fund, etc. doesn't affect me WHATSOEVER, so I am only doing what I think is best for you."

THIS IS OUR INDUSTRY.  Every other fucking cock sucking thing you do has to be document, document, document and cover your fucking ass so some jerkoff ambulance chasing attorney can't link up with some whiny ass client that thinks his advisor should pay for his losses because the S&P 500 shit the bed 30%.  

It is, what it is.  Get used to it.

It's if you opt for the "per trade" setup with the custodian instead.  That is where you run into trouble by paying it on behalf of your clients (because your compensation if affected by how much you trade).

It doesn't matter how much or how little (well, it does to a degree), but it matters when a conflict simply EXISTS.  It doesn't even matter if you act on the conflict, it just matters that it's there.  And when you can avoid one, you should avoid it (hence AUM based fee to custodian OR client pays the ticket charges).  And if you can't avoid it, you must disclose it (and even then, you still have risk).  

I am fairly certain it's better to have the custodian bill it separately, or else you have to check "Yes" to the question of "do you sponsor a wrap fee program?"  

Got it.  Didn't realize you had a high turnover management style (most don't, which is why the AUM fee billing is less popular with RIAs these days).  

If you're doing AUM fee unlimited trading, no worries.  

Based on not wanting to have the client pay a very large LTCG on the money I invested for him on March 9th, 2009.... Because I'm a fucking genius! I figured $900 in ER's outweighed the 15% on $2mm in gains.

Example 2:  You hold a 12 fund portfolio of ETFs for your clients in a 50/50 allocation.  The market tanks 2 years from now and your clients are down anywhere from 10 - 25%.  One of your clients goes to see an attorney because he is pissed that he lost money (yes, this happens ALL the time).  That attorney sees that you pay these costs for you clients, and decide to allege that you STUBBORNLY held those same ETFs, even though the market was tanking, and you should've known better and "gotten your client off the tracks" before it bottomed out.  How do you defend that?  

Because we are following a long term strategy based on their ISP that is outlined here, here and here. Said client is in the top tax bracket and on numerous occasions documented here, here and here didn't want to sell or rebalance on numerous occasions because the market was up and didn't want to pay taxes on the gains just yet.

Example 3: You hold PIMCO Total Return fund for your clients.  The fund has been lagging the benchmark for about a year now.  You continue to hold it because Bill Gross is the bond king, active management usually wins with fixed income, and you aren't ready to give the fund the boot quite yet.  However, 2 more years go by, and Bill Gross continues to lag the benchmark by 1% annually.  You now have lots of clients that have lagged a simple bond index by 1% a year for 3 years, AND the MAJORITY of PIMCO Total Return's peer funds have not only beaten it, but beaten the index as well.  Your client then goes to an attorney, and they allege that you didn't want to dump the fund even though it lagged, and lagged, and lagged because YOU didn't want to eat the transaction costs.  

How fucking dare you disrespect PTTAX! It's the backbone of this fucking country and is a symbol for the very blanket of freedom that you get to sleep under at night. I don't remember the douchebags name who called me a soulless monster for recommending a client sell it and rebalance it must, but I'm sure he must be dating or blowing the fund manager, Bruce Jenner's doppelgänger.

These 3 scenarios all get worse if that attorney puts an ad in your local newspaper asking your clients to contact him/her regarding a lawsuit about you taking advantage of them for your own paycheck.

In every scenario above, you have no defense.  However, if the CLIENT pays the cost of the transaction, you have absolutely ZERO conflict of interest when it comes to what fund to hold.  You can say "buying this fund over that fund, or this ETF over that fund, etc. doesn't affect me WHATSOEVER, so I am only doing what I think is best for you."

THIS IS OUR INDUSTRY.  Every other fucking cock sucking thing you do has to be document, document, document and cover your fucking ass so some jerkoff ambulance chasing attorney can't link up with some whiny ass client that thinks his advisor should pay for his losses because the S&P 500 shit the bed 30%.  

It is, what it is.

-------------
“He gonna put ya’ll back in chains!”

-the guy who actually put them back in chains with the 1994 Crime Bill 👍🏻 👍🏻 👍🏻...

Wait, even if you CAN use it as a justification, can you PROVE that your claim has anymore merit than the clients claim that you held off on the trades because you didn't want to pay the ticket charges?  

Yes, I know my Vanguard to Fidelity example is both unlikely to happen and kind of picky.  In a more likely example, say a management team leaves BlackRock and goes to First Eagle to manage a similar fund.  Let's say you continue to hold the BlackRock Fund for whatever reason.  Then let's say the BlackRock fund underperforms by 5% vs. the First Eagle fund.  Maybe that year FE is up 2% and BR is down 3%.  Let's say it's a $1MM position.  Your client alleges that you should've followed the management team to First Eagle, and you didn't because you wanted to save the ticket charge money, so you should cover the difference in performance.  

Granted, these are simplified examples.  But you are creating a conflict of interest that you can't easily explain or justify beyond reasonable doubt.  Seems silly for $15 a trade, but if you have 500 accounts and you pay for both buys and sells, you're looking at a $7,500 kick in the junk to make that change.

It would have legs in an arbitration.  

A little Ed Jones coming out there?

I simply say, there's a management fee of 1.40%.  Expect to pay $100 a year in trading cost to the custodian.

that's the worst I can come up with.

You're new here, so I'll give you some advice. Wet_Blanket and Helado are far more likely to "deliver" than SF. 

I don't think I knew Wet 4 years ago when I went RIA. Besides, the bloaks I used weren't any cheaper than Wet (based on what Wet told me).

And dude, the All-World All-MINT strategy is fucking LIGHTS OUT! 

But you would still both "deliver". 

I didn't know most of you guys that well until we got into AH.

Wow, I barely remember RegRep, come to think of it. That place turned into a shit-show, fast.

OK, but my point is, what if you have say one account in the block that is 50% Equity Strategy 1 ,and 50% Bond Strategy 1, and another that is 80/20. And you want to buy JNJ in both accounts and you want that position to be 5% of the equity piece.  In the first portfolio, you will want to be buying 2.5% of the overall portfolio. (5% of 50%). But in the second portfolio, the same 5% of the equity piece will be 4% of the overall portfolio (5% of 80%). So my question is, how do you tell the system to buy 5% jnj for all accounts in their equity piece?

Thats something i deal with. Because i may have 5 accounts in my ETF strategy, but the 5 accounts may have 50, 60, 70, 80 and 90% respectively, of the portfolio in that strategy, and the rest of the portfolio in bonds. One thing my system is lacking is the ability to identify the piece in each account that is strategy A, and trade it accordingly.

So i am curious if your system has the ability to do that, to identify sleeves within each account, and trade them together in one block.

You're a fucking homo all the way. Feel better now? 

Don't fuck with me. I have too many friends here.

First you create a strategy. For example, Equity Strategy1 (10 stock strategy equal weight):

JNJ - 10%

MSFT - 10%

etc. for each of the remaining stocks.

You do the same for the Equity Stategy 2 and the Bond Strategy.

Then you go in and create a portfolio.

AggressivePortfolio

EquityStrategy1 - 40%

EquityStrategy2 - 40%

BondStrategy - 20%

ModerateAggressivePortfolio

Then you go in and assign client accounts to the Portfolios.  So after all of your clients are assigned to Portfolios, when you need to make a change to a strategy, you just go into the strategy and add/remove the positions.  Click the accounts, and say rebalance.  It does all of the work for you.  It recognizes that different clients have different weights.  It is very slick.  I can literally go in make changes to all three of my strategies and rebalance every account I have in less than 30 minutes.  There are a lot more useful features, but that is the biggest one for me.