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moneyguy View Drop Down
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Post Options Post Options   Thanks (0) Thanks(0)   Quote moneyguy Quote  Post ReplyReply Direct Link To This Post Posted: May/21/2010 at 3:19pm

Great post!  It seems the custodian selection process is pretty important, as it looks like it sets the groundwork for a lot of the technology that integrates into it.  Can you talk a bit about your custodian selection.  You may have explained why you chose Fidelity previously, but I didn't find it, and it could be good to include here in terms of "what one should look for".  .  Also, what performance management reporting did you select, do you like it?  You mentioned in another post that you use a paperless office.  Is that a function of software/technology you purchased, or just your own process?  How do you store and backup your data?  I could ask a million questions, but these are what came to mind. 



Edited by moneyguy - May/21/2010 at 3:47pm
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Guests Quote  Post ReplyReply Direct Link To This Post Posted: May/21/2010 at 6:16pm
Why RIA over broker?
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Moraen Quote  Post ReplyReply Direct Link To This Post Posted: May/21/2010 at 6:21pm
I'll try to answer the other questions later.

But just to answer Volt's question real quick...

Being a broker lacks flexibility in marketing.  In addition, I wanted no hands in my pocket.  I prefer to control ALL of the costs.  It requires more work, but there are tradeoffs either way.  Basically there are plenty of more freedoms associated with being an RIA.

In addition, RIAs don't have to worry about FINRA.  I hate FINRA.  We are regulated by the states and the SEC.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote cali123 Quote  Post ReplyReply Direct Link To This Post Posted: May/21/2010 at 6:32pm
Originally posted by Moraen Moraen wrote:

  I hate FINRA.  

+1
Its just something about your face. I wanna punch you right in the suck hole! POW!
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Wet_Blanket Quote  Post ReplyReply Direct Link To This Post Posted: May/21/2010 at 6:46pm
Originally posted by cali123 cali123 wrote:

Originally posted by Moraen Moraen wrote:

  I hate FINRA.  

+1
 
Amen.  Although all FINRA people I've interacted with where pretty cool (it wasn't an audit situation).  Not to hijack, but I do like how much guidance they give on isses (unlike the SEC).
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Moraen Quote  Post ReplyReply Direct Link To This Post Posted: May/23/2010 at 11:15am
Originally posted by Debolt Debolt wrote:

Great post Mo. I am planning to do something similar but my issue is no real book to transfer considering I am on a team and not a senior member. I would be curious if a strong producer and weak infrastructure FA would be interested in starting a firm with a weak producer but strong infrastructure skills.

 

Can you add a list of expenses to move and the expenses ongoing to fund an RIA?

I would ask for cash flow reports but you inflows would not be relative to me or anyone else. Also you do not need to provide your $ expenses, but perhaps your opinion on the least each would cost.

 

note: after reading this back I am not sure it makes sense so let me know if I need to reword my question.

 

Tks again!!!



D - I overspent on expenses to move.  Got some nice furniture, iMac for every office and the front desk.  Things that I didn't necessarily need when I left.

I can email you my report for my first year in business (or first two months, since that has all of the initial start up expenses.

Ongoing expenses for me are payroll (largest), rent (I was going to buy another building but it is a cost I'd rather not incur right now), Orion performance reporting, Cable, and power.  Also a few ongoing things like GoogleAdwords (which changes monthly) and business suite at Bank of America.  About $30 a month to handle bookkeeping and payroll.

I would say if you work out of your house, by yourself, you could have expenses of around $500/month.  If you have an office of just you and an assistant, you could get away with $2500 - $3000 per month.  Breaking down expenses just won't help you, as my situation is completely different than yours would be.

I know for a fact that there are some guys who are just REALLY good at sales that need someone who is good at the advising part.  There is a guy here who was selling shit he didn't know how to do.  He ended up hiring a guy who had been working in various financial capacities at banks for the last thirty years.

This guys was pulling in about $10 million a month in assets, but was bleeding assets because his investments management system was flawed.


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Post Options Post Options   Thanks (0) Thanks(0)   Quote Moraen Quote  Post ReplyReply Direct Link To This Post Posted: May/23/2010 at 11:22am
Originally posted by moneyguy moneyguy wrote:

Great post!  It seems the custodian selection process is pretty important, as it looks like it sets the groundwork for a lot of the technology that integrates into it.  Can you talk a bit about your custodian selection.  You may have explained why you chose Fidelity previously, but I didn't find it, and it could be good to include here in terms of "what one should look for".  .  Also, what performance management reporting did you select, do you like it?  You mentioned in another post that you use a paperless office.  Is that a function of software/technology you purchased, or just your own process?  How do you store and backup your data?  I could ask a million questions, but these are what came to mind. 



I chose Fidelity because I was too lazy to do any other research.  Although I got lucky I think in my choice.  They aren't the most attentive, but the program is robust, and I like it.

Orion has the best performance reporting IMHO. 

My office is as paperless as it gets.  Our signature pages are kept online even.  But I do print stuff out because I can't stand looking at the computer for somethings.

Most of that is simply scanner technology.  I also utilize RackSpace as a backup, in addition to my local backup of all files.  RackSpace's director of sales is a good friend of mine, so the cost is free for that. 

As for what you should look for in a custodian:

1)  Depends on your style, but I prefer people to leave me alone.  Fidelity for sure does that.

2)  AUM requirements.  Make sure you meet them, or you'll be charged.  I know a guy who went RIA with Fidelity, didn't bring over the requisite assets, and now gets charged $1200 a quarter.

3)  Technology.  Fidelity is behind places like TradePMR and others, as their web-based platform is strictly IE.  If you use Macs, that sucks and you have to use something like Wine to use IE.

4)  Someone that is complementary to your investment style.  If you do a lot of trades, figure out where it would be lowest cost to go.  Options?  Find the lowest cost options provider.

5)  That said, if you can work out the arrangement, you can use multiple custodians.

6)  Fee pulling platform and cashiering program should also be robust.  Make it as easy on yourself as possible.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Guests Quote  Post ReplyReply Direct Link To This Post Posted: May/31/2010 at 9:11am
Mo, can you practice across state lines? 
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Moraen Quote  Post ReplyReply Direct Link To This Post Posted: May/31/2010 at 9:50am
Originally posted by Volt Volt wrote:

Mo, can you practice across state lines? 


Up to five clients before you have to register.  Or if you have a place of business in the other state.

If you are registered with the SEC, you have to file notice filings for more than five clients.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Maksim Quote  Post ReplyReply Direct Link To This Post Posted: Jun/14/2010 at 8:48pm
great post.
Former Amp P1 & UBS, Now RIA and couldn't be happier.



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Post Options Post Options   Thanks (0) Thanks(0)   Quote Maksim Quote  Post ReplyReply Direct Link To This Post Posted: Jun/14/2010 at 8:49pm
Originally posted by Moraen Moraen wrote:

Originally posted by Volt Volt wrote:

Mo, can you practice across state lines? 


Up to five clients before you have to register.  Or if you have a place of business in the other state.

If you are registered with the SEC, you have to file notice filings for more than five clients.


Just FYI, this is true in most states.


In states like Texas though, it doesnt matter, and even 1 client you have to notice file.

Former Amp P1 & UBS, Now RIA and couldn't be happier.



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Post Options Post Options   Thanks (0) Thanks(0)   Quote workinhard Quote  Post ReplyReply Direct Link To This Post Posted: Jan/09/2011 at 6:55pm
The whole living expenses thing... just out of curiousity...
 
Couldn't you get a small business loan for start up... and include a salary for yourself for a year?  I'm not saying you SHOULD, but hypothetically, isn't that doable?
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Post Options Post Options   Thanks (0) Thanks(0)   Quote RIArules Quote  Post ReplyReply Direct Link To This Post Posted: Jan/09/2011 at 8:27pm
Originally posted by workinhard workinhard wrote:

The whole living expenses thing... just out of curiousity...
 
Couldn't you get a small business loan for start up... and include a salary for yourself for a year?  I'm not saying you SHOULD, but hypothetically, isn't that doable?
If you can find a banker that will do it, sure.  You would be putting your ass on the line, but that's how most startup businesses are built.
We may "rob you slowly," but you're not going to see that shit.

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Post Options Post Options   Thanks (0) Thanks(0)   Quote Guests Quote  Post ReplyReply Direct Link To This Post Posted: Jan/09/2011 at 8:31pm
Originally posted by workinhard workinhard wrote:

The whole living expenses thing... just out of curiousity...
 
Couldn't you get a small business loan for start up... and include a salary for yourself for a year?  I'm not saying you SHOULD, but hypothetically, isn't that doable?
Startup loans are almost non existant for businesses that have been in business for less than 3 years.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote RIArules Quote  Post ReplyReply Direct Link To This Post Posted: Jan/09/2011 at 8:41pm
Originally posted by LSUAlum LSUAlum wrote:

Originally posted by workinhard workinhard wrote:

The whole living expenses thing... just out of curiousity...
 
Couldn't you get a small business loan for start up... and include a salary for yourself for a year?  I'm not saying you SHOULD, but hypothetically, isn't that doable?
Startup loans are almost non existant for businesses that have been in business for less than 3 years.
If he can get an SBA guaranty specialist to give him the time of day, not really...
We may "rob you slowly," but you're not going to see that shit.

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Post Options Post Options   Thanks (0) Thanks(0)   Quote B24 Quote  Post ReplyReply Direct Link To This Post Posted: Jan/09/2011 at 9:12pm
Many SBA and SBA-type programs will not fund salaries.  Most are willing to fund capital expenditures, inventory, real estate, etc.  And some of the programs fund on draws, based on specific purchase orders and/or invoices.
If I were a banker, I would think real hard about funding a business where the primary expense is the owner's salary.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote RIArules Quote  Post ReplyReply Direct Link To This Post Posted: Jan/09/2011 at 9:29pm
You are right, that's where the all ubiquitous "working capital" category comes from.  I have written packages and signed checks for some really, really hairbrained ventures.  Usually involving the progeny of good clients, at the behest of my superiors, though.  The low-doc program is littered with these.  I actually cut my teeth coming out of college as an SBA guaranty packaging specialist.
We may "rob you slowly," but you're not going to see that shit.

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Post Options Post Options   Thanks (0) Thanks(0)   Quote RIArules Quote  Post ReplyReply Direct Link To This Post Posted: Jan/09/2011 at 9:38pm
Now here's a funny one I had almost forgotten!!  A fruit smoothy operation for the child of a (get this) financial advisor, who had just graduated from college.  All in, it was about $250,000, which penciled out to about $5.00 a smoothie for break-even.  I left that particular bank well before they had begun operation (and in part because I thought my boss had lost his mind), but I do know that the FA is still trucking, and that particular son is now his father's employee.
We may "rob you slowly," but you're not going to see that shit.

Edward Jones Newb, Circa September 2016
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Post Options Post Options   Thanks (0) Thanks(0)   Quote workinhard Quote  Post ReplyReply Direct Link To This Post Posted: Jan/10/2011 at 7:34am
Thanks for the comments guys!
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Post Options Post Options   Thanks (0) Thanks(0)   Quote RIArules Quote  Post ReplyReply Direct Link To This Post Posted: Jan/20/2011 at 12:21pm
We may "rob you slowly," but you're not going to see that shit.

Edward Jones Newb, Circa September 2016
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