Intro

Corey: hey everyone Corey wellan managing partner bridgemark strategies firm that’s helped thousands of financial advisers objectively explore the broker dealer and raia Marketplace and help them find the firm with the right combination of feel fit and financials for them in their business

Why Advisors Are Asking About The RAIA Channel

Corey: now more than ever I’m speaking with more employee financial advisors and financial advisers that are already at an independent broker dealer that are interested in learning more about the raia channel

Corey: as I’ve discussed in other videos there’s plenty of benefits to talk about there’s increased product selection increased Technologies you can use to better improve your overall client experience more consultative compliance are just some of the reasons

The Payout Question

Corey: but typically when financial advisers start having a conversation with me they’ll ask me Corey what kind of payouts can I expect when I make a move or plug into an raia versus an independent broker dealer and your answer is just like most other things it really depends

Typical Independent Broker Dealer Net Payout Range

Corey: when you take a look at the independent broker dealer space you start out from anywhere from a 90 to a 95% payout based on your production and then from there after all the admin fees the ticket charges your errors in emissions Insurance affiliation fees you’re down from anywhere to a net 70 to 86% payout

Typical RAIA Net Payout Range

Corey: on the ra side it’s it’s a little bit different so on the raia side the pricing is really really flexible and because the firms are smaller it greatly varies firm by firm but on average on the raia side you’re taking a look at netting somewhere in between 80% of your total trailing 12 Revenue all the way up to 90% of your trailing 12 revenue

Corey: and the tools and resources inside of those platforms greatly vary

Model 1: Standard Plug-In RAIA Model

Corey: so I figured I would just break down a couple of the different models for you and what pricing looks like inside of each one of them

Corey: so the first type of RA model is just a standard plug-in raia model and on average you’re looking at 100% payout on all of your fee based business and if you have any brokerage business they typically have a broker dealer that you could expect somewhere around a 90% payout on

Corey: but out of that 100% payout on your fee based Revenue you’re looking at anywhere from a 12 to 18 basis point platform charge on top of that that includes all of your technology your compliance your billing and all the tools and resources inside of that firm

Corey: so in short if you wanted to net 1% to yourself as an organization you’d have to charge anywhere from 1.12 to 1.18 to break even at 1%

Model 2: Fixed Cost Plug-In Model

Corey: there’s other pricing models out there that are more fix cost models so to plug into somebody’s ra a maybe you’re paying $35,000 a year as a financial advisor once again you get access to the billing the technology the compliance the tools and resources inside of that organization but you get 100% pass through of all of your revenue and there’s no platform fee

Corey: so if you’re doing a million dollars in trailing 12 revenue and you’re Char and you’re getting charged $35,000 a year to plug into someone’s raia you can see how that could be really preferable you’re already at a 96.5% payout as you grow your business to 2 million you’re at an even higher payout

Model 3: Bare Bones Model

Corey: then another model that I see out there is just kind of a bare bones model there’s not a lot of tools and resources inside of the ra but they do handle compliance they do handle billing you pay for your Tex tax separately but you can be close to you know a 95 plus perc payout on your fee based business

Equity + Governance Options

Corey: many of these firms they will offer equity in the organization they’ll offer you voting rights in the organization as well which are really attractive if they’ve been part of a firm for a while that’s had a lot of changes that they had absolutely no say in

Corey: there’s a lot of raas out there that are majority owned by the financial advisor so they actually have a little bit of control in terms of the future direction of the firm

Pros And Cons: Payout Vs Upfront Money

Corey: so as you can see on the Raa side the payouts can be significantly higher I’d say the Con on the raia side is there’s little to no upfront money

Corey: the highest upfront money I’ve seen for a financial adviser as an incentive to make a transition is maybe 15% uh most of the time it’s it’s 0%

Corey: where on the independent broker dealer side you’re looking at anywhere from 50 to 100% of your trailing 12 Revenue as a sign on bonus to make the transition

Wrap-up

Corey: so as you can see tons of different options out there pros and cons of both uh we could help work with you help you understand what’s on the menu out there in the industry uh get a deep understanding of your business and just narrow it down to the potential best three or four firms to complement what you’re trying to do in the future uh instead of just overwhelming you exploring you know 20 different firms

Corey: I really hope this helped I have plenty of other educational videos on the raia space on my YouTube channel and my podcast if you have any questions I’d love to have a conversation thanks so

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