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Industry Spotlight > RIAs

A Moral Commitment to Your Clients

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Interest among wirehouse brokers in going independent ebbs and flows over the years, depending on the size of recruitment packages and public standing and marketing value of the brokerage firms. Whether the move to independence is a surge or a trickle though, the path has historically gone from wirehouse rep to independent BD rep. While the recruitment volume isn’t currently high, and so any inferences should be made and taken cautiously, Ellen Uzelac’s cover story (“Model Non-Employees”) seems to suggest greater interest among wirehouse brokers in forming or joining RIAs than has been the case in the past.

Possible reasons for this emerging trend would not seem so hard to divine. For one thing, recruitment packages aren’t as high as they’ve been and the brand value of the big firms has taken a hit in the wake of the financial crisis. But why is the RIA side seeing a surge of interest as opposed to the more conventional BD rep path?

There, too, the answers can be guessed at. For one thing, it was always easier in the past to go from (wirehouse) rep to (indie) rep, but today many of the independent firms offer turnkey RIA solutions — so it’s simply easier to be an RIA today. The winds of change in Washington — specifically the fiduciary amendment to the financial reform bill now under consideration — may also have kindled interest in moving to an RIA platform. Indeed, when no less a personage than Sallie Krawcheck, president of Bank of America’s global wealth and investment management division, calls for a fiduciary standard, an uptrend in RIA business models would seem to be confirmed.

This may be a good trend — and it may be an inevitable one — but in the fog of debate let’s not lose sight of the fact that an advisor’s method of registration does not in itself determine his or her standard of ethics. If acting as a fiduciary to clients is a good thing — and it absolutely is — why wait for Congress? As most folks who have had any sustained success in this business know, proper care for clients is just good business.

What that means is treating your clients’ money as if it were your own – actually, as if it were even more important than your own; doesn’t the ship’s captain assure everyone else’s safety first? Beyond the skills and judgment that come with education and experience is a moral commitment to your clients. If you’re constantly thinking about your clients and how you might most be helpful to them, you will surely constantly engage in an effort to align your business model with their need for valuable, objective advice.


When I hired senior editor Ken Silber, I thought he could bring something unique to our industry with his Historical Research series of articles. I am pleased to see the validation of that idea in NYSSCPA’s conferral of its prestigious journalism prize. Congratulations, Ken.

Robert Tyndall
publisher emeritus
[email protected]


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