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March 01, 2009 at 02:00 AM
As editor of this magazine and someone who’s been covering the independent advice industry for more than 10 years, I sit in an interesting spot. You, our readers, are people who I’ve come to know, understand, and admire. I’ve become friends, even good friends, with some of you. I’ve visited your homes and offices and met your staff.
I also get to meet the top executives of the firms with which you partner–the software makers, the mutual fund companies, insurers, consultants of every stripe and, most notably in this context, the custodians who would like you to custody your clients’ assets and the independent broker/dealers at which you hang your license(s).
For some time, the lines between custodian and indie B/D, between registered rep and registered investment advisor, have not been blurring, but overlapping. While it’s rare to see an RIA head back to the broker/dealer fold (though some B/D executives swear they have sighted this elusive creature), it’s become commonplace for a broker/dealer rep to also do advisory work, either through her own RIA or the broker/dealer’s corporate RIA. More recently, many of the larger, and dare I say it more far-sighted, broker/dealers have taken their RIA strategy a step further. At LPL, Raymond James, Commonwealth Financial, and the ING Advisors Network, to name but a few, affiliated reps and even otherwise unaffiliated RIAs can take advantage of new custody relationships with those B/Ds. It’s a smart business move, since much of the infrastructure in an independent B/D can just as easily support an RIA.
