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Industry Spotlight > Broker Dealers

Quasi-Concierge Services

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One of the many advantages of operating your own wealth management business, especially if you’re an RIA, is the flexibility to determine your offerings. When comparing a broker/dealer arrangement with an RIA, both will likely offer investments and perhaps financial planning, but an RIA is probably more likely to offer additional services beyond that of a broker. One reason for this is that the broker is subject to their broker/dealer’s compliance and an RIA is responsible for their own compliance.

Now, don’t misunderstand, an RIA is also subject to compliance and is held to a higher standard than a broker, but an RIA has more leeway in deciding what they will offer. It’s common to find broker/dealers who will not allow their brokers to offer services outside of their platform. Since broker/dealers have oversight responsibility on the activities of their brokers, they will understandably attempt to keep a tight rein on them. Also, a broker/dealer is in business to make money on the activities of their reps so unless they can find a way to take a piece of the action, the rep may not be able to offer a wide variety of services, which brings me to this week’s point.

As an RIA and the owner of a wealth management business, I position myself as offering a “quasi-concierge” type service. In other words, whatever questions they may have, they can bring to me. If I don’t know the answer I’ll research it or bring in another person to assist.

There are two additional services I have decided to offer which are extremely valuable for many clients. For those who have a mortgage, I’ve found a company that has developed a program which accelerates the payoff, beyond that of just paying extra principal from time to time. I had a meeting with one of my clients and a rep from this company and through their program, the mortgage–which has 24 years to go–will pay off in 9.6 years. In case you’re thinking, “Sure it’s possible, if you throw enough additional capital at the principal,” this result will occur without increasing their cash outflows! Many of the largest national and regional banks are familiar with this program.

Another offering is called cost segregation. This is an income tax technique for residential rental and non residential real estate which increases near-term depreciation, saving the client a significant amount on their federal income taxes. To read more about this, look for the April issue of Investment Advisor magazine (available online starting March 25). In it, I’ve written an article expounding the benefits as well as the mechanics of this wonderful technique.

Thanks for reading.


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