Why you should fire your Broker Dealer and Finra to become your own Registered Investment Advisor.

How to Become Your Own Independent RIA
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Critical Business Setup and Practice Management Information for Financial Planners and Investment Managers

This page explains WHY you should consider permanently firing your Broker Dealer (BD), and Finra, and then becoming your own Registered Investment Advisor (AKA RIA).

HOW to actually do it is at the bottom.

I'm in a unique position to rant about this topic, because I've been a BD Rep agent several times, in several different 1099 and W2 modes, since 1988. I've also performed back-office functions as a case writer and investment portfolio manager, both as an employee, and independent contractor; for around 100 BD Rep agents, and RIAs, in person. Then I receive e-mails and phone calls from financial advisers monthly for going on two decades, telling about their BD and Finra horror stories. So all of this is as Real World as it gets.

About becoming your own RIA firm.

First, some basic things about this whole deal:

• "RIA" is not a professional designation, so you cannot put those letters after your name. So doing any of this is "illegal":

Smart T. Advisor, RIA
Smart T. Advisor, Registered Investment Adviser

• RIA is pronounced like the letters - "are eye eh," and not "ree ah."

• Most financial advisors dispensing investment advice for compensation need to register, depending on your state.

If giving investment advice is only "incidental" to what you mainly do for a living, you don't custody client funds, receive compensation directly for dispensing investment advice nor are allowed to make trades in client accounts, you just do it once and don't have a relationship where you're consistently giving investors advice, and the number of people you advise is below the minimum required in that state; then you may not even have to register to be an RIA in that state.

For example, there are many rich and famous investment advisors that manage multi-millions in client funds, but since the total number of people they do that for is under five, or it's just for their own family, or they don't get paid to do it, then they may not even be required to register.

So if this is you, then check with the state's finance department where you live, as you may not even have to officially be an RIA to keep doing that. For example, if you manage the "family fortune" of a bazillion dollars, with a dozen people in the family, then you most likely would not have to register with anyone.

• The SEC (Securities and Exchange Commission) only requires that you register with them at the national level when you directly manage more than $100M in total client assets. If so, then you'll do that instead of filing under your state(s). You can do this when your AUM (assets under management) is less, so it's your choice whether to do it at the SEC or the state level.

• The Department of Labor's Fiduciary Rules are for Broker Dealer Reps, peddling whatever "crap" makes them the most money. When you're not a BD Rep, there's little-to-nothing you do that falls under their radar. So if you're afraid of that, then not being a BD Rep and being a fee-only RIA is by far the best way to resolve that upcoming train wreck.

• The spirit and intent of these laws and regulations are in place to prevent fraud, abuse, and advisers "running off to Mexico" with their clients' assets.

So if you're in a position where there's no way you can do any of that, even if you really wanted to, then your state will probably say that you don't have to register.

The point is to ask your state's finance department, or a professional RIA setup consultant, about it.

• This page is really only for, and about "producers," AKA salespeople.

There are many positions in the financial services industry that require being Finra licensed and then being hooked up to a BD, which are not sales positions.

This page doesn't really apply to them because they have actual "jobs," where the BD usually pays for everything (including E&O insurance), and they don't get paid directly via commissions (because they're on salary or are paid hourly).

But technically, they're still considered to be registered and thus "representing Finra" through that BD (AKA a "Registered Rep").

This page is for and about life as a typical BD Rep agent financial advisor that wants to offer more investment-related services, and little-to-no life insurance company product (e.g., variable life insurance or variable annuities).

• If you want to sell variable life insurance company product to make those commissions, then there is no way to do that without also holding that type of insurance license (AKA being an agent), and being at least a Series 6 Finra licensed Rep working through a BD.

As an RIA, you can still obtain just a fixed-only life insurance license with your state, and then be an agent and thus able to sell fixed annuities and term life insurance and straight plain fixed whole life insurance (UL but not VUL), but that's all, and then just to people in your state.

So if you want to make commissions by selling more than just term or fixed whole life and fixed annuities, and give investment advice for fees only; then you'll need to be a licensed Finra Rep via a BD. When you're just an RIA, you can only be compensated via fees for service.

However, depending on your state, RIAs can "partner up with" BD Rep agents, and then legally share commissions via referral fees, finder's fees, and other fee-sharing agreements.

This way the fee-only RIA can send their client to the Rep agent, and then they can sell them a VA or VUL. Then the agent Rep can "kickback" money to the RIA to compensate them for the "free lead." Then the RIA may also charge the client AUM fees for performing investment management duties (e.g., asset allocation) on these subaccounts (by getting them to write a separate check out directly to their RIA firm).

• 12b-1 fees are still treated as commissions, when they are actually fees (a mundane industry "fail" that can't be fixed).

So if you're just an RIA, and not also a BD Rep, then you cannot receive mutual fund 12b-1 fees (AKA trailers).

This is a ~15% income reduction, because Your custodian keeps them as part of their compensation. This allows them to lower your trading ticket charges, so it's not all for naught.

• It's important to first face it: As a financial advisor, whether in BD mode or as a one-person fee-only RIA, you don't have a "job." You're mostly a salesperson running a practice, selling products and/or your services.

So the top-level question then becomes, what's the optimal way to do that?

There are three generic RIA advisory models:

1) Pure RIA: This is a 100% fee-only model using independent RIA custodians. You are compensated only via advisory fees, and can't earn commissions by selling any product. Most of the time, you are totally on your own when using this model.

2) Open-hybrid Model: This is where the RIA is also hooked up to an independent Broker Dealer. The main attraction here is the ability to be a Fee-Based money manager. This RIA model allows you to earn money management fees, and also commissions and trailers (12b-1 fees). Here you are sort of on your own, but are still controlled by the BD and Finra.

3) Closed-hybrid Model: This is where the RIA affiliates with a traditional BD that supports RIAs, but the BD uses only captive products and services (e.g., Ameriprise), and won't let the RIA use most any product or service outside of the BD's business model. This is the opposite of being totally on your own.

This page is mostly about the pros and cons of giving up being paid via commissions (commission-only and/or Fee-Based) and Moving up to the very top of the financial planner pyramid (AKA the "food chain"), by using a pure fee-only business model.

This means you'd only get paid by charging your clients' fees directly for your financial planning and/or investment management advice and services.

Start your independent Registered Investment Advisory Firm.

The Overall Process in a Nutshell (HOW):

To do that, you'd fill out several forms and pay a few hundred bucks to your state's finance department to become your own Registered Investment Adviser. Then it's a two to three month waiting process for them to do their things. This sounds easy, but sometimes it's not (read how to get help at the bottom).

Then after your RIA firm is set up, you'll choose a custodian to hold (custody) client assets, and allow you to make investment trades in their accounts.

If you're starting from scratch, with no AUM, then you'll need to hook up to one that allows you to get started without a current book of business. Don't despair, because some do.

Custodians are compensated via trading ticket charges, and by keeping mutual fund 12b-1 fees. So usually none of your fee income is kept by anyone as an independent fee-only RIA.

Then after you've done these two things, once you engage a client, you'd either get them to write a check out to the custodian, or ACAT their investment assets from their current custodian into your new custodian's account(s).

Engaging the client is basically giving them a copy of your Form Adv, having them sign your new client form(s), and whatever client agreement(s) you'll use.

So obviously, you'll need to sell them on your brilliant financial advice and/or services before they'll hire you to manage their money and/or make financial plans for them. All of this is AKA "initially engaging the client."

Once you've converted them from being a prospect into a client, then it's just a matter of getting their money and/or current investments to flow into their new accounts that you've set up for them via your custodian. Your custodian will have all of these forms, and most of the time will even do all of this account transferring legwork for you (AKA the ACAT process).

Then once that's set up, you'll sell their currently-held investments that you don't like, and buy ones you do.

Then, assuming you'll charge AUM fees of 1%; at the beginning of each month, 1/12th of 1% of the clients' total account balances will magically flow into your personal account with the custodian. This is how you'll get paid, and it's now your before-tax money to withdraw and spend.

Tips: It's better to set this up so you'll get paid "in advance" and not "in arrears." Then getting paid monthly is much better than quarterly. Always ensure there is enough cash (money market) in their (sweep) accounts to cover this expense. If you don't, then you may not get paid, or they'll automatically sell shares of things you didn't want them to in order to get your fee money.

Then you'll constantly keep your eyes on the ball, stay on top of their investment portfolios, rebalance accounts quarterly, perform all of your required compliance functions, Maintain E&O insurance, perform in-person annual reviews, keep your client's happy, be ready for the state and/or the SEC to show up at random to perform an audit; and then guess what? That is it! That's all there is to it. No Broken Dealer, no Finra, no compliance department, no other people with their fingers in your pies, and you get to keep all of the money you earn.

You can also become very well compensated for creating financial plans, by getting them to write out checks directly to your RIA firm. So for as little as $50, you can buy basic retirement planner software needed to project your clients' financial futures, and charge them hundreds a year in fees. Or if you want to become the great artisan in your local area, you can spend less than $1,000 a year, and create magnificent masterpieces for many thousands in financial planning fees.

Now Let's Get Started (WHY):

Being your own independent RIA costs a small fraction of the work, time, and money compared to dealing with a Broker Dealer to be a Registered Representative of Finra.

The many risks to your practice, clients, and personal life will be greatly reduced too. Just the fact that nobody can "terminate you," will lower your stress and blood pressure enough to allow you sleep better, which could add years to decades to your life.

The only real disadvantage is that you won't be able to earn commissions (or 12b-1 fees) anymore.

Some say an advantage of being a Finra Rep is that you'll get "supported" via a BD. But the vast majority of that support is mostly for things that you'd only have to endure and waste resources on if you're a Finra Rep - like compliance, filling out their forms (so you can open accounts and make sales), pass licensing exams, etc. So they're really only supporting you on things that you would not even have to deal with if you did not "work there" in the first place.

Actual support for the hard things that matter, like basic financial planning and sales training / canvassing / prospecting / lead generation / sales / marketing / closing / how to create financial plans / paraplanners and case writers / and how to actually manage money; are all usually virtually non-existent.

This is for the mundane reason that Broker Dealers are just too broke and broken these days, and thus can't afford it. Back in the "good 'ol days" (the '90s), they had the resources to give this type of support. But all of the Great Debacles of the first decade of the new century changed all of that forever. So now most BDs are what I humorously call, "Broken Dealers."

So you'll need to get to the bottom of what kind of "support" you'll receive to see how valuable a BD relationship really is. Some actually do provide support, like letting you set up shop in an office rent-free, sharing the services of an administrative assistant, using their phones / computers / copiers / office equipment and supplies for free, etc.

But if you dig deeper into the details, you'll see there is no free lunch. You'll be paying for it ALL in one way or another. ALL of a BD's expenses are paid for entirely by their Reps. Always keep in mind that BDs are a "creature from Wall Street."

Then some green advisers get to be mentored by truly great salespeople, so missing out on this rare gold nugget would be a disadvantage, if you were your own RIA.

But again and as usual, if you dig into the details, you'll see that a slice of your pie will usually be going to pay your mentor / trainer / financial planning coach.

So one way or another, you'll be paying them. Usually a percent of your commissions gets routed through your Branch Manager, and then given to your coach either directly or indirectly.

If not, then don't be surprised when you're forced to coach the new rookie Rep agent, when you get to be the "veteran seasoned advisor" of the office.

Some life insurance companies (e.g., Principal) even force their agents to use these multi-level marketing tactics as a normal part of their business model. So you'll be forced to train green rookies, at your expense, until they start selling on their own.

There is absolutely no free lunch in this business, industry, nor anywhere on Wall Street whatsoever. This is the industry with by far the most expensive lunch tabs to ever exist.

A guesstimate is that "BD support" includes things of actual value less than 10% of the time. Only you can decide if what they offer has real value or not.

If you're already a Broker Dealer Rep (thinking of becoming your own RIA), this means it may take a while to be weaned off of this support and the unpredictable series of one-time pops of relatively big short-term commission income.

This means expenses usually exceed income until enough RIA clients are signed up.

But once you have $5 million under management (@1% is $50,000 a year of gross income), life as an RIA is a piece of cake compared to being a Finra Rep working through a BD.

Starting out being fee-only results in a relatively small, but long-term, stream of predictable income that grows over time.

It usually grows over time, because you're getting paid on clients' account balances. So if you're doing your jobs correctly, then their investment portfolios will grow over time, and losses will be minimized. So every month the markets go up, you'll get a free raise. But every time they go down, you get a forced pay cut. So it's critical to learn how to reduce these risk to a minimum, and grow your accounts slowly, by using asset allocation strategies and techniques (and not ETF trading).

Usually what happens when you "make a sale," is you'll get someone to transfer their investment account to your custodian (where you'll be the one making their investment trades).

Then you'd charge upfront (or arrears) fees every quarter, or month, of around 1% of the total amount of assets you'll be managing annually.

So if you make a $100k sale at 1%, then all you're going to get initially is ~$250 when the paperwork goes through, if you charge quarterly in advance. If you charge monthly in arrears, then you won't get your $83 until the beginning of next month.

If you were a BD Rep, then you could make as much as $3,000 initially - but that's it. Other than the few bucks in 12b-1 fees that trickle in over time, you won't get paid again on this client.

As an RIA, you'll make ~$1,000 a year, right on schedule, until the client "pulls their account" (fires you).

You'll usually automatically get paid monthly or quarterly from investment management fees, and then you can also get paid randomly when you charge by the hour (or per job) for financial planning. This is basically the difference in how you'd get paid.

The RIA business model is the way of the future. The BD business model is the way of the past. This becomes more obvious as every year passes.

Since The Great Recession started destroying most everything financial around 2008, net on average of about 10,000 commission-based financial planners have left the business a month. This has substantially slowed starting around mid-2014.

That means if you read somewhere that 5,000 new financial advisors joined the industry, then 15,000 also gave it up in the same month. Just during Q1 2013, over 30,000 people in the banking industry were "laid off." From 2000 to 2006, the number of Finra Reps dropped by around half.

From 2000 to today, the ranks of Registered Investment Advisers have been steadily growing. There has not been one-year, ever, when the total number of RIAs have declined.

So when you read that being a financial planner is ranked one of the "best jobs," you need to realize that these "large numbers of happy financial advisors" is extremely misleading. This is because of a statistical term called "survivor bias."

If instead of just interviewing 1,000 old seasoned veteran advisors that have already "made it," they also interviewed the 100,000 that quit, were terminated, are struggling, or for whatever reason left the industry and went back to their "day jobs" over the same time frame; then being a financial planner would rank very close to the bottom instead. For every one fat and happy advisor, there's 100 that are either very unhappy, or gave it up and went back to their day jobs. So don't be fooled by any of that marketing nonsense.

More hype you should also ignore is, "This is the time to become a financial adviser, because the baby boomers are all retiring en masse, and they will need to hire professional advisers for advice on how to manage their 401(k) rollovers!"

That's true, but most investors have had their life savings wiped out by the Great Recession, couldn't invest money over the last decade because they weren't making enough money to pay their bills as it was, and those that have money to invest are just getting online and learning how to do it themselves. Then the government recently helped enable 401(k) investors to buy fixed annuities, instead of rolling their money over into a DIY IRA.

So if that were true, then there would be dozens of thousands of financial advisers becoming more fat, happy; and either retiring or slowing down into semi-retirement - and then hiring new employees by the boatload to help service their book of business, so that they can be the ones that get to go out and goof off for a change.

Or there would be dozens of times more interest in selling their practices for premium prices.

Also instead of just a few new financial advisers contacting us weekly about the New Financial Planner Starter Kits, there would be dozens.

If there were as little as 1,000 net new financial advisers coming online a month, then our business would increase by an order of magnitude. Ditto with DIY consumers and investors magically having substantial new monies to invest.

None of that is even remotely happening, and it won't either; for the bottom-line reason that most everyone is still "broke and broken," almost five years after the Great Debacles.

Both of those marketing falsehoods are just Wall Street trying to recruit fresh meat for their BD grinders. So just ignore it.

The Broker Dealer industry is still trying to squeeze the last buck out of an obsolete business model (as you can see by AIG and Merrill Lynch going under in September '08, and over 100,000 brokers being laid off over the last decade, from firms like UBS, in 2009).

The Broken Dealer business model is all about maintaining many small commission-based clients, lots of frequent transactions, many conflicts of interests, shenanigans, high-risk of getting into trouble, massive amounts of paperwork / service work / mistakes to be fixed, dependence on American Funds and life insurance company products, and being captive to the never-ending parade of annoying time-wasting expenses of Finra - all just in order to earn commissions and 12b-1 fees.

That's why this whole Wall Street industry is still contracting, even five years after the Great Meltdown that caused the Great Recession has ended.

Meanwhile, back on Progress Street, hundreds of new RIA firms are still sprouting up, and prospering, monthly.

Why Become Your Own Independent RIA?

The main reason why the BD / Finra world is so terrible to work in, is because there's a bazillion ways to lie, cheat, and steal from clients to generate commissions from selling product.

As a result, the regulators (Finra, the SEC, and BD compliance) have tightened the screws on everyone to the point of it being unbearable. So it's like fighting a never-ending parade of uphill battles in a war that cannot be won, regardless of what you do.

As you may know, the endless parade of sometimes frivolous rules and regulations that makes it harder to do business just gets worse every day. Every time a Rep figures out a new way to rip someone off to make more commissions, Finra eventually finds out, punishes the Rep & BD, and then creates a whole new set of rules and regulations that everyone needs to abide by to stay in compliance.

This is why there's a never-ending parade of "love letters" from your compliance department on all of the new ways you "can't make a decent living" anymore.

For example, the Waddell & Reed sales managers that were responsible for me getting into this industry (the infamous Morales brothers), ended up being the poster children for using "deceptive advertising practices" to recruit Reps back in '88.

So just because of them, there was a whole new set of Finra rules governing what can be said when a BD advertises for new Reps. After that, you rarely see ads in the generic local print media for new BD Reps anymore. This is because without the standard pack of lies, people would sign up for that about as much as they'd sign up for being a telemarketer. Without the full-page ad that enticed me to join up in the local newspaper of a single-mom smiling and saying, "I made $196,000 last year, and I only work a few hours a day!," the good 'ol days of getting quick and easy herds of fresh meat for their sales grinder is very much over.

So over time, all of these rules and regulations put a clamp on just about every way a Rep can lie cheat and steal to make commissions. This is great for investors, but it paints Reps into a corner that they can't get out of.

Also, the Internet and progress in general, made it so financial salespeople couldn't get rich anymore by using good 'ol mutual funds, starting in the late 20th century.

I know, because I was one of them, and that's one of the primary reasons I gave it up.

For example, in '88, when I sold $10,000 worth of mutual funds; after the BD ate half of my commissions, I made $425 before taxes. Then around 1990, more mutual fund families came online with lower loads. So the funds I was selling dropped their commission rates from 8.5% to 7.5% to remain competitive. So I only made $375 for selling the same deal. Then in '92, it was $325. In '96 it was down to $275.

This 35% pay cut in less than a decade was in addition to high cost of living inflation, and was totally beyond my control.

So I, and everyone else said, "If this keeps up, then I'll be working for minimum wage, so it's time to bag this deal and move on to something more profitable."

That something for me, was bagging being a commission-based product peddler altogether. But for the career peddler, the only options left that "paid anything," were annuities and whole life insurance. There were literally no other options, after limited partnerships went the way of the dinosaurs, and because stock trading commissions (AKA individual securities) were falling at the same rates.

Around 1998, the Internet provided free access to information, and then discount brokers made it so investors could use this information to do their own investment research, and then implement their own investment strategies at very low costs.

So when commission-based "financial planners" realized their incomes were being squeezed from all sides, just about the only product left that still "paid a decent buck" were annuities.

So not only are BD Rep agents' having to endure always increasing constraints on how they can conduct business, their expenses keep skyrocketing, while their incomes are always slowly declining via this "great race to the bottom."

On the other hand, there are very few ways to cheat clients to make more investment advisory and/or financial planning fees (and the ways there are result in amounts so small, that it's just not worth it). Unless advisors really want to cheat, by doing things like using mutual fund C-shares in addition to charging investment management fees. But then it's only a matter of time before someone catches on and calls shenanigans on them.

Also if an RIA client becomes unhappy, then they can just terminate the relationship on the spot. Then they'd even get a refund of pre-paid fees, if the adviser billed in advance. Then the relationship is over, and the advisor no longer gets paid. Then their account(s) are already in-place for them to DIY.

A client firing their commission-based financial advisor usually results in a whole lot of nothing. No return of commissions paid, no money to pay for the losses of getting into bad investments, no way to get out of their annuities, no apologies for anything, etc. and so forth. You paid your money, took your chances, and then just lost on that whole deal.

Then not only is the investor probably in a worse position than they were before paying the commissions, now they have to waste resources finding a new advisor to boot.

Then to add insult to injury, the BD only fired that Rep from servicing their account. Their account is still stuck with that BD. So now they're an "orphan," which means an even worse brand new starving Rep will be hounding them about needing to make fresh sales in order to survive.

Sometimes after insureds wake up and cancel their whole life insurance policy, they could lose around half of their money if they cancel at the wrong time (shortly after their free-look period expires).

Here's another chicken that could be coming home to roost on BDs' doorsteps soon: To increase revenue, the government is always thinking about just eradicating all tax sheltering benefits from all life insurance company products. They raise that flag just about every year to see who salutes. Then it gets shot down via political contributions, just as surely as the sun rises.

So think about how well-liked you're going to be (and how many referrals you'll get) when you erroneously tout the wonderful tax benefits of whole life insurance and annuities. Then right after the sale is made, ALL of those tax benefits go away, and everything is taxed just as if all of the investments inside of the contract were exposed like a non-tax-qualified Schwab account. So this is a heads-up warning to start getting ready now for this whole industry paradigm shift.

So from the investor's point of view, going through the whole deal, and then having to fire a commission-based advisor costs them dozens of times more money, time, work, stress, and grief, than having to fire an RIA fee-only advisor.

Because of these huge differences in business models, the amount of compliance, laws, testing and licensing, rules, regulations, and continuing education requirements are only a small fraction in the RIA fee-only world, compared to the commission-based BD Rep agent world.

More Benefits of Being Your Own RIA:

• You can completely disassociate yourself from Finra! That's right, NO MORE Finra anything period, forever!

This means much less wasted time and work, little-to-no exam passing or continuing education annoyances, and then eliminating ALL of their expenses, regulatory paperwork, too expensive BD E&O insurance, several forms of real risks, U4 & 5's, surprise audits, correspondence, the bureaucracy, etc.

All you have to do is stop being a "Registered Representative of Finra," and they're totally 100% fired and out of your life forever (after a small tail-period).

This will save you many hours per week of wasted time and doing tons of work that doesn't result in making money. You'll also sleep better and your blood pressure will be lower knowing you, your family, and your practice are a lot safer. Plus, over time, you'll save much more money than it costs to be an RIA.

Depending on your state, you may still need to pass the Finra Series 65 or 66 exam. But this is nothing compared to passing and maintaining a Finra Series 7 General Securities License (and enduring all of those semi-annual CE exams).

• You can disassociate yourself from having to be hooked up to, controlled by, and giving tons of your money away to a Broken Dealer. That's right - NO MORE BROKER DEALER!!!

Yes, that means NO MORE COMPLIANCE people, bills, rivals, office politics, drama, worthless assistants, manager, obsolete technology and office equipment, etc. and so forth, forever!

You'll still have to abide by your state and/or SEC's compliance manual, but it's nothing compared to Finra and a BD's compliance department. See for yourself by going to the Financial Planning Association's (FPA) site and download their compliance manual, which may end up being the one you'll use. Don't forget to check out NAPFA's tools and information too.

Unfortunately, BDs don't care much about you. They can't, just because of the very high turnover in this business (less than 10% of new Reps are still with the same BD three years later).

So all they really care about is sucking as much life and money out of you as possible, while covering their behinds as well as possible, during your "visit."

Broker Dealers are basically profit centers (for the owners of the BD, not you the Rep), and you are by far their biggest source of revenue.

This means you'll have to pay for EVERYTHING (one way or another), and anything that goes wrong, they'll do everything they can to make it all stick only onto you.

As you probably already know, they treat you like you work for them. But in reality, they work for you. You are the one doing ALL of the work needed to make money. Then they keep a huge part of it. This is how YOU PAY THEM.

They don't actually do one thing that makes any money. They maintain the necessary infrastructure for you to make money, but you're paying for all of that; plus their cushy offices, assistants, barely functional office equipment and technology, unproductive meetings, their high incomes, travelling, full benefit packages, retirement plans, conferences, retreats, sick leave, and paid vacations. All they do is cost you money.

Try to get them to understand this basic concept, and then see what happens!

The relationship between the Registered Rep and the Broker Dealer is one of the most lopsided arrangements ever created. Over the last decade, BDs narrowly escaped having to pay Reps salary for the massive amounts of overtime they work. Hopefully someday more equity will be legislated into this arrangement. But don't hold your breath for this Wild Wild West Wall Street survival-of-the-fittest the weak are meat and the strong shall eat capitalist adventure to ever be tamed.

For the vast majority, being a BD Rep is a terrible deal compared to being your own RIA. All you need to do is weigh the pros and cons to see.

Broker Dealers are a creature of American Wall Street capitalism. This means: First, the whole deal was set up and funded by the few people at the top of their food chain for one and only one reason - which is to make them, and only them, as rich as possible in the least amount of time while doing the least amount of work. One way I know for sure, is that I was a key player involved in a failed BD startup in 2003.

So their primary concern is always going to be to protect their investment that went into building the business.

Their next concern is keeping their corporate overlords (their parent life company that's too big to fail, if any) happy, so they won't get replaced by people that are totally with their program.

Their next concern is avoiding legal troubles, which is why one of the owners, and/or primary stockholders, is usually an attorney with years of industry experience.

Their next concern is how much money they can squeeze out of the operation and funnel into their personal checking accounts (while compensating the actual worker bees as little as possible in salaries, wages, and benefits, of course).

Their next concern is for the politicians that want to change their deal. So they all need to be kept well-fed and happy, so nothing will ever happen on that front.

Their next concern is for the employees of the BD that actually do the work.

Customers and policyholders are next to last on their list of concerns, even though the usual corporate marketing spin says they're on top.

Concern for their Rep / agents (their lives, their families, and their careers) is always at the very bottom.

This is especially so with life insurance orientated BDs. The Rep agent is basically just the newest serving of fresh meat that has about a 20% chance of surviving (their sales quotas) over the next year.

Agents and Reps come and go monthly, so they don't care. It makes zero financial sense to care. All they care about is how much of your life they can suck out of you while you're temporarily stuck helplessly bleeding on their meat hook.

Then once they feel they've sucked as much life out of you as they can, then you're usually "terminated" to make room for the next serving of fresh meat that's, "more ambitious."

If you think this is a harsh analogy, then either ask someone that's been freshly terminated (so they'll remember the details), or you can play the role of prey and find out yourself.

They basically treat their Rep / agents like expendable meat. It's either their (usually life insurance peddling) way or the highway. The whole deal is so far past ridiculous that most of them just need to go under and start over from scratch.

Other benefits of not having a Broker Dealer are:

Nobody tells you what to do, when to do it, what not to do, or how to run your practice. There is NO sales manager or boss.

No more "payouts" or giving any of your hard-earned money away to anyone. You keep 100% of the money you earn (unless you join an RIA firm as an IAR - Investment Adviser Representative; then they'll take a cut of your fee income).

There's no more corporate culture disseminated from the top that's designed to maximize BD shareholder value. This leads to arranging the Rep's compensation structure to favor products that will most efficiently reach this goal. This leads to sales meetings where management focuses on how to get Reps to peddle the most profitable products to opportunities (clients).

As an RIA, you're free to make your clients' best interests the main goal, and not maximizing BD shareholder value.

There will be no more "mistakes" when calculating your paycheck. Isn't it convenient that every time there's a "mistake," the result is you get paid less and the BD keeps more money than it should have? Have you ever seen this kind of "accounting error" result in you making more commission than you should have? No, what a mystery, huh?

Whenever this happens you'll have to waste time fighting yet another uphill battle to get your money back. Then, sometimes you don't even win (so you'll just have to live with people that lie and rip you off).

No more sales quotas and constant fear of being "terminated" (fired) for not producing enough. Even if you sell enough, you're still at risk for not selling enough of your BD's pet investment products, that make only them the most money (e.g., American Funds, whole life insurance, fixed, and variable annuities).

No more pesky branch or sales managers that want to keep track of everything you're doing all day, micro-managing your activities, and are always giving you grief about why you're not selling more.

No more being lied to constantly by your BD and not being able to trust anything anyone says.

As an RIA, you can take time off whenever you want, without having to ask anyone for permission, and even have a whole lean year. Try doing that as a BD Rep and see what happens. Even if you meet their sales quotas - the first thing they'll do is give your office away to fresh meat that's "more ambitious."

No more being limited to only using financial planning and investment management software that's approved by your BD (mostly because the vendor kicks back money or other goodies in exchange for only approving of their too-expensive software).

No more being stuck using only expensive, time consuming, ineffective, inaccurate, limited, and inflexible financial plan software. This means you'll have the capability of doing whatever you want when it comes to financial planning and managing money for your clients.

BDs usually treat you like you're a dangerous moron until you get to be a "top producer." So until you're on top, then it's either their way or the highway. After you're on top of the sales charts, then you'll be able to throw your weight around regarding using the money tools needed to do your jobs well.

As an RIA, you can use the right financial tools needed to do the jobs, and there's nobody around to say you can't do that.

No more trying to force a square peg into a round hole by trying to get clients and prospects to do things they don't want to do, just so the BD can squeeze more profit out of your work.

No more BD compliance audits and fear that someone from Finra or BD compliance will just show up at random at your office wanting to waste days of your time inspecting all of your computer and paper files doing nothing but looking for ways to get you into trouble. Just like most everything else in the Finra / BD world, only bad things can come from this (what possible good could come from a surprise audit?).

As an RIA, the state may show up, and if you manage over $100 million, then the SEC may show up to audit. But it's not near as frequent, and is a piece of cake compared to a BD / Finra compliance audit.

Plus, if you manage real money as a BD Rep, then BD compliance, the state, Finra, and the SEC may all show up at once to do surprise audits. This could stop your life for a week.

So when you're rich and famous, then you're eliminating three out of the four entities that will show up out of the blue to audit, as an RIA. In other words, when you're a fee-only RIA, then only the SEC will show up to audit, when you manage over $100 million.

No more censorship, editing, approvals, or being told you can't say, send, mail, write, or publish this or that. As an RIA you're able to write, say, send, and publish anything you want to prospects and your clients in personal letters, your website(s), blogs, social media, FaceTubes, Tweets, e-mails, newsletters, marketing seminars, promoting new services, etc. and so forth - all without anybody else being involved.

No more having to wait up to weeks, nor having to spend $15 to $25, just to get a simple letter edited, approved, and sent to someone. There's also much less having to waste time on keeping detailed records for years on what you sent to whom, when, what went with it, and all that.

No more having your business e-mails routed through your BD's censorship screening server, where someone has to approve it before it gets passed on to you, or sent out. This means getting e-mails immediately instead of dealing with delays that could take days.

In case you didn't get it - yes, your BD is not only reading ALL of your e-mails, but they're also screening them before you or your people read them. So if they don't like what's being communicated, then they just won't let it get through. Then they don't even tell you about what they blocked. Then if you ask what happened to this or that e-mail, it could take days for them to get arountuit - if they ether bother at all (because sometimes they'll just delete it).

No more being afraid that just someone's "tone" in an e-mail / text / Tweet may constitute a "complaint." Just one whiny client e-mail about your BD not sending a tiny client their statement on time could have an endless parade of serious repercussions.

All "complaints" need to be kept forever in a file folder in your office, brought to the attention of your Broker Dealer, which then has to submit it to Finra, which then goes on your permanent record. Not going through all of this by ignoring or not filing hard copies of e-mails properly will get you into even worse trouble.

The only way around this trap is to just not do electronic communications at all with clients. These paragraphs got here because once a Rep in my office received a whiny e-mail from his best friend, who was a tiny client, about the BD not sending his monthly statement on time. This molehill got blown into a mountain, and the Rep finally ended up quitting Broken Dealer world and became his own RIA - with this complaint, which he had nothing to do with, and wasn't even an actual complaint, STILL on his Finra U-4/5 today over a decade later.

So I learned from that blunder, and then totally disconnected the BD e-mail address, and then told all clients to never use e-mail for anything ever again. That's no way to prosper in the 21st century.

You can make and maintain your own website, and be able to say and do anything you want with it - without having to be Finra securities licensed in all 50 states, and then having it be "approved" in all 50 states by BD compliance, and then having to pay to do all of that over and over again annually.

So if you are a tax-preparer, tax attorney, or perform similar functions, your BD will most always say, "No, you cannot do that anymore, it's a conflict of interest, so you have to take all of your websites down, and cease and desist immediately."

When you're a Registered Investment Adviser, then you can continue doing all of that all you want to.

The only actual conflict of interest here, is that you'll be spending time on those functions, when the BD is only interested in you selling products for commission. So there's not really any conflicts of interests going on. They just make less money when you perform these other functions, so they just say no. Basically anything that takes your focus away from peddling their products for commission, they'll slap a conflict of interest label on, and then say you cannot do that.

In case you're wondering, if you disobey any of these draconian "our way or the highway" orders, then you're just terminated with permanent bad marks on your U-4 / U-5 - which makes it almost impossible to join another BD.

Some BDs have recently been requiring their Reps to encrypt their computers. Not much good can come from that time-wasting and dangerous activity. Windows Firewalls are sufficient, and if they really cared about such things, they would just ban working in the clouds. Then it's going to slow down your computer even more.

No more worrying that the BD will steal your clients if you leave them for another BD. Even if they don't, then you'll lose thousands of dollars and hundreds of hours of time during the month's-long block transfer process.

You'll have to send all of your clients change of BD update letters, and then hope they'll get around to signing and returning it someday, so you can get paid from them again.

If they don't sign and return it, then the old BD keeps the client and all of your money that you've earned from them - forever.

Even if they do sign it, the old BD still keeps all of your money until they get arountuit, when it comes to approving all of these individual and/or block transfers.

This nightmare is compounded several times if you switch custodians too (e.g., moving client investment accounts from Pershing to Schwab).

Not only is your old BD going to do everything it can to keep your clients, and then pass them off as "orphans" to their rookie Reps; they're going to stall the transfer process as long as possible to keep as much money as they can, just to "punish" you for abandoning them.

BDs are in a constant "state of war" with each other over retaining Reps, so they will punish you all they can if you're "a traitor and defect to the enemy."

Then there is fixing all of the "mistakes" the BD will create during this process to try to keep as much of your money as possible for as long as possible.

Living in BD world is like being in a constant state of uphill war 24/7 forever with no hope of truce, cease-fire, or winning. The best you can hope for is a stalemate. Sometimes these battles drag on for years.

Because it's such a major ordeal switching BDs, you're usually stuck like a fly in their spider web. They know it and exploit it every chance they get.

So it's much easier to leave your BD, keep all of your client accounts with the same custodian, and then just delete the BD flag from the account and replace it with your RIA. But then you could be stuck with an inferior custodian, which could be an inefficient, money-losing, time-consuming, thorn in your side for many years to come.

You can eliminate all conflicts of interests with your clients when you only charge fees. Forget about being coerced into doing bad things you don't want to, like abusing American Funds and life insurance company products. Being an RIA allows you to work with no ulterior motives.

No more BD limitations on how you manage money for clients. As long as its disclosed on your Form Adv, then you can use just about any investment strategies and/or tactics you want to.

No more worrying that you can't make a trade because of churning. This is because you don't get paid a commission via trading (like a stockbroker).

You can also forget about having to pay attention to every mutual fund breakpoint, out of fear of violating those rules. This is because all of that is about loads, which are commissions, which you don't receive anymore.

This also means that when you're an RIA, you'll be using a "Fee-Based trading platform." This means you can buy loaded mutual funds (AKA A-shares), and then these loads are waived (in other words, you're buying load funds at NAV, and not paying their loads anymore). This allows you to access most every mutual fund in the universe. This is very important. You can analyze the difference in long-term investment portfolio returns between our Fee-Based models, and the same models using just no-load mutual funds. This difference is solely based on the ability to use loaded mutual funds, without paying the loads.

Kiss not having full discretion goodbye forever too! If you think an investment needs to be sold now, you can do it now only if you have full discretion. Very few BDs give their Reps full discretion. This is extremely important to everyone.

This means you'll have to send your clients a form that needs to be signed and returned authorizing the trade, or a phone call needs to be made getting their permission. This then needs to be logged, filed, and stored for years. By that time, they could have lost money when it could have easily been avoided.

Just wanting to sell one investment in all of your client's accounts could take days to weeks. Money can't be managed well like that, so their performance is going to suffer, which makes you look bad.

None of this works well for anyone. It's a lose-lose scenario - even for the BD. They don't like it either, but there's just too many "dummy Reps" screwing too much up for everyone. So they have no choice but to make blanket policy for all Reps.

So you'll have to jump through all kinds of hoops to get them to even give you "limited discretion." This means that you can do basic things like asset allocation rebalancings without needing the clients' permission - but that's about it.

As an RIA, you'll always have full discretion. This is because when you initially register, you'll just check that box on all of their forms (and not any box that says anything different).

This means you can make any trade you want to, whenever you want to, without having to contact the client. You can also execute asset allocation rebalancings without having to get permission, because there's nobody looking over your shoulder scrutinizing every trade.

All this is critical if you want to make a living managing money. There is no way you can possibly realize good returns for your clients without having full discretion - it's just as simple as that.

No more being at risk that some stupid little mistake (that you had nothing to do with, and was all your assistant's fault) will put a bad mark on your U-5, resulting in thousands of dollars in fines, being suspended, terminated, or losing your licenses or even ending your career.

We've seen a top producer's life literally brought to an end just because his assistant accidentally deposited a $34 check into the wrong bank account (which led to the Next paragraph). He ended up being his own RIA after years of expensive lawsuits and having no income in BD limbo. Even though things were terrible for a few years, he's much better off now than he would have been if the incident never took place. This happened in 2003. Here's what he e-mailed to me in January 2015 as being the end result of that long war: "...I won my arbitration against my old company. The bad news is that it cost me $300,000 and I only won $30,000 but at least I cleared my name."

No more worrying that an inter-office political and/or power struggle may turn an insignificant event into losing your practice. We've seen it happen several times where one Rep will snitch on another, just because they want to be the alpha dog. Then they'll fire the old dog and the new alpha gets to keep decades of the old alpha's life's work for themselves.

You are usually the one and only alpha dog when you're running your practice as your own independent RIA. This is usually because there just are no other dogs in your world at all. So all of that annoying barking in BD world is totally non-existent.

It takes years and dozens of thousands of dollars in legal fees fighting off these types of disputes. During this time you'll be in BD limbo, meaning you can't make any money - even from your existing clients.

This is because once you're terminated from one BD, and/or you have a bad mark on your U5, it's going to take a miracle to get hooked up with another one. This is even if what they said to Finra to get the bad mark put on your U5 is groundless, fabricated, or entirely their fault (or someone else's).

You're now tainted meat to every new prospective BD because of this. Just hiring someone without a clean U5 may even make their, and your, E&O insurance go up - way up.

So it's very hard to get a new BD to take you on once you have even the smallest entry on your U-5 form.

Every time we've seen this happen, even if the Rep wins, dozens of thousands of dollars and hundreds of hours are usually wasted. In the meantime, you could be "unemployed" for months. Then you can't even collect unemployment insurance, because you were not an employee (you were a 1099 "independent contractor").

Then even if you eventually win, and it turns out to be all the branch or BD's fault, you can't even sue anyone for wasting all of those resources.

BDs know they have all the power (and the lawyers), and they know they can abuse it to screw you over the moment they don't like you anymore (or they see an opportunity for a power grab, or just profit). It's all in black and white in the contracts that you signed. It makes no sense to let someone have this much power over your life, just so you can collect commissions.

No more never-ending parade of "love notes" about new compliance regulations, rules, office procedures, preferences, reminders, warnings, cautions, memos, do's and don'ts, and things that just end up sucking more life out of you without making money or providing any benefit.

No more having to waste time, energy, and money explaining every little thing to branch or sales managers that are too stupid and/or don't have the time, desire, or attention span to understand the details about anything. Sometimes it's a full-time job just babysitting your babysitters.

No more time-wasting (branch / compliance / product / sales / wholesaler / marketing) meetings. You don't make money sitting in meetings, and there's much too much of that in BD world - and none when you're your own RIA.

You're also able to eliminate mutual fund and life insurance company wholesalers that call all the time and/or just show up at random trying to get you to use more of their products.

Try telling your branch manager that you don't want to meet with their American Funds, and/or pet life insurance company wholesaler, and then see what happens... OMG!!!

All of these meetings can add up to over fifteen hours per week of totally wasted time. At a big AIG BD in 2004, Reps were forced to endure endless hours of "sales meetings," which were usually little more than having to listen to an American Funds wholesaler drone on forever about why their mutual funds are the best invention since the wheel, with all of the goodies Reps will get if they become a good soldier and oversell them like they're ordered to (by their Branch / Sales Manager).

No more being gouged on overly expensive, or worse - useless, Errors and Omissions insurance because you're stuck with only the BD's carrier. The average cost of E&O these days for a BD Registered Rep is $3,000 a year. Then there's usually a $75,000 deductible! That's right, so even if an event happens and you're covered, up to $75,000 will come right out of your bank account if you lose the fight, before insurance kicks in. So you're effectively paying through the nose for something that's totally useless most of the time. Things are like this because "dummy Reps" just keep screwing things up, triggering claims, which make rates go up through the roof for everyone else.

Because the risks of everything are much less in RIA world, and you can shop around, RIA E&O costs less than half - with much more actual coverage, and less than half the deductibles.

No more having to only employ expensive people that are Finra licensed and can pass all of the harsh screening criteria of your Broker Dealer. This could save you dozens of thousands of dollars annually in wages and hundreds of hours annually in employee turnover.

People that are squeaky-clean and have all of these BD-required resume bullet points and licenses demand top dollar, even if they're mostly useless when it comes to actually performing their required functions. Then if they have any smarts, they'll move from one job to the next to advance their careers, or they may try to steal yours.

As an RIA, you're free to hire your talented, hard-working, competent, loyal, and trustworthy friends and family for much less money instead. This is the only way to get people to stay long enough to make all of the time you spent training them to pay off (and to ensure your practice stays in the right-hands if something happens to you).

No more being harassed about other things you (or even your spouse) do on the side that may or may not even make money (AKA BD and/or Finra restrictions on "outside business activities"). Everyone in your world is totally free to do whatever else they want to make money, and/or have fun, when they're off-duty, when you're an RIA.

In June 2013, Finra tried to over-regulate Reps' personal lives too, by trying to make rules so they could regulate ALL "outside business activities."

This is so far past ridiculous, that it's not believable. Someone had a few brains cells over there, so this didn't pass. But these draconian "guilty by association" rules may pass someday.

So if you have a wife that cuts hair for a living, and something happens where she loses her license, gets a DUI, or whatever, then YOU could be terminated just for that "association!"

So as you can see, Finra, continues daily to push the envelope as much as possible on what's reasonable work to do in exchange for commissions. It's just a matter of time until all of this becomes so unbearable that there's a mass-exodus.

No more intrusive credit and background checks, corporate spies, or covert investigations prying into your personal life just looking for ways to get you into trouble; if you're "not a team-player 100% with their program." Yes, if a BD just doesn't like you, then they may hire professionals to "investigate" everything in your personal life, in hopes of finding something they can use to terminate you (or use as leverage against you if needed).

No more prying eyes demanding passwords to your FaceBook, social media, and FaceTube accounts just looking for every way possible to get you into trouble either.

Most BDs will also try to steal your intellectual property (things like financial software or other money tools that you've created to do your jobs better) when you leave.

It's probably right in your contract that anything you "invent" to make anything better is automatically theirs, even though you were not even their employee! How's that for a lopsided deal? There's usually a whole section in your contract titled, "Inventions" that clearly spells this out. My second to last BD tried to do that when I was terminated in 2001. They demanded passwords to RWR upon exiting, and I just told them where to stick that request.

As an RIA, you can even keep your day job, and work from home, while you grow your fee-base part-time at your own speed. Most everything like this will invoke the standard reflex response from Finra and the BD, "You must stop doing all of that immediately, or you're terminated!"

If you're not 100% with their program, so they can suck ALL of the life out you, then they don't want anything to do with you. If you choose to hide a day job, and they find out, then you're terminated, heavily fined, and then banned.

With BDs everything is always, "My way or the highway!" Again, it's a perpetual war, so if you're not a "good soldier" willing to fight to your death for their cause and only their cause, then you're just shot as a traitor at sunrise.

Fellow RIAs cooperate with each other much more, whereas BD Reps don't, because they see each other as rivals (for the lavish retreats and prizes won at sales contests, and the perks that may come from being on top of the latest sales chart).

• Because commissions decline every year and regulations and expenses increase every year, the commission world is shrinking as more advisers wake up and catch on.

The number of Finra Reps fell more than 50% between 2000 and 2010. About 1,000 Reps were laid off a month from large brokers like UBS just in 2009 alone.

Because nobody in their right mind wants to hear about stock trading or investing in perpetual down-to-flat markets, thousands of Reps were literally starved out of the business and then had to go back to their old day jobs during the Great Recession. The number of RIAs more than doubled during that time, and their fees kept rolling in right on schedule.

According to a 2006 Cerulli Associates study, assets under management with fee-advisors that custody with Schwab Institutional increased at an annualized rate of 23.1% since 2002; and only 9.8% under brokerage firms.

According to a 2006 RIA Benchmark study done by Moss Adams, investors have had extremely positive experiences with their independent advisors - boasting a 97% client retention rate. 90% indicated they were comfortable providing referrals.

49% of independent advisors' new clients came from full-service brokerage firms in 2006. 75% of them said they left because of high-risk performance-chasing, overreaction to news events, overconfidence, and their broker didn't have Investment Policy Statements that were aligned with their investing goals.

Other investor complaints from 60% were high expenses, a disproportionate amount of proprietary products, and overweighting in a single sector or stock (nowadays ETFs).

BD Reps have around 90% failure rate in their first few years. Clients don't like having a different Rep every few years. Clients usually hate BDs and Finra too, and will like you much more as an independent RIA. The more they like you, the more money you'll make, and the more free referrals you'll get.

Fee-only is the way of the future, and is your natural evolution if you're any good at what you do. Just forgetting the feast and famine way of life that is commissions is the best option.

• Being fee-only is the best way to grow a predictable stream of stable income that's needed to survive down and flat markets, vacations, hospital stays, births, disability, or anything else that may come up that takes you away from working.

Commissions stop the moment you stop prospecting. Fees continue to roll in even if you're out for months.

• Being able to charge fees solves the dilemma of making financial plans for prospects. When all you can do is make commissions, then you're stuck with this choice: Make "financial plans" for prospects "for free," or don't even offer that service.

If you offer it, then the vast majority of the time, you'll Fact Find, make the plan, and then present the plan. Then your prospects will say how great you did, they won't buy your insurance or annuity recommendations on the spot; and then they'll end the meeting with, "We want to think about it."

Whenever you hear words like, "I'll think about it" or "I'll have to run this by someone else," or "We can still be friends," then you know it's over!

So you'll usually spend that time and do all of that work creating and presenting financial plans for free, when you're working in commission mode.

When you're an RIA, you can get out of that no-win mode by directly charging for financial plans. Just don't do any work in that regard until they pay, even if it's only $100. It's just that simple - no more working for free, ever! You'll do this by putting what you charge in writing, and then collecting half up-front. This way if they bail, at least you'll have been paid something.

• Fees are the only way to win when this great money game is finally over for you. You'll be able to either work part-time at your own pace, or get a good price for selling your book of business when you want to retire. The financial calculator that estimates the value of an advisory practice is here on the Time Value of Money Tools.

For example, if you have $20 million under management at 1% fee, then you'll receive ten times the money if you sell out, compared to having $20 million of commission-based mutual funds; where all you're receiving is ~0.1% in 12b-1 trailers. Then if you're an ETF jockey, you won't even get trailers.

Whomever is buying your practice is doing so mostly to own this income stream. So what's worth more - $200,000 a year, or $20,000? This is where the big payoff is at the end of the money game. The pot of gold at the end of your rainbow will be directly proportional to the spendable gold nuggets it can generate for the new owner. It's just as simple as that.

You can never be free of production quotas when you're with a BD. Which means you can never retire without giving up your life's work, or selling it for pennies on the dollar.

The BD is usually going to suck every ounce of life out of you until you drop dead. Then they'll do everything possible to make it so your family doesn't get squat (because they'll keep all of your clients so they can pass them off to their new rookie Reps as orphans, instead of letting your family sell the business). Just ask advisors that have been through this, and then you'll see.

Being an RIA is just about the only way you can wind down your career at your own pace, and then sell your practice for enough money so that you can retire, all while giving your family something if and when you pass away before then. Isn't that the primary reason you're doing all of this in the first place?

BDs are like vultures and can be counted on to act that way as soon as they smell one drop of your blood.

• The freedom to remove most all limitations, expenses, restrictions, complexity, annoyances, and stupidity from your business will enable you to concentrate solely on providing maximum value for your clients.

Too many cooks spoil the broth. Once you know what you're doing, then you'll see that you don't need anyone for anything (other than a custodian and maybe an assistant). The fewer people messing with your practice, the better off you'll be. Firing your BD and Finra is like losing 100 pounds overnight.

Being able to give clients what they want and need is the only way for YOU to prosper. The only way to prosper long-term in this business is to wear a "White Hat," and consistently give your clients what they want in exchange for a reasonable fee.

Our financial plan software is a great "White Hat" way to provide real value that clients will be happy to pay fees for - and will for decades to come.

Providing services of value is also the only way to receive high-quality referrals that become paying clients.

The commission-based world is all about wearing a "Black Hat" while struggling to force a square peg into a round hole by selling high-commission products and trades, life insurance company products, financial plans created with fake planning software, and abusing American Funds.

According to most BDs, these are the only solutions to every need, goal, concern, and objective every client has, every time, no exceptions, period.

If you're always wearing the commission Black Hat, clients will eventually leave when they figure it out. Hard selling people what they don't want or need is like forcing a square peg into a round hole. This is why "closing the sale" is always so hard.

Life is much better for everyone when you're solving actual needs with efficient and state-of-the-art products and services that people agree with, want and need (AKA placing a round peg into a round hole).

• You're a true professional when you're a fee-only financial planner or investment manager. The only things you sell are yourself and your valuable services.

When you're a BD Rep, you're always a salesperson first, because you need to constantly sell, sell, sell product to feed your family and to meet your high-commission quotas.

You can use your brain to be a true financial professional using actual numbers to help people plan for their future when you're an RIA. Whereas you're basically just a mouth spewing hyperbole to peddle unwanted product as a BD Rep.

There's no time to do the work, and little-to-no payoff, when it comes to running the actual numbers needed to forecast clients' futures when you're working in dark-side BD mode. That's why they usually only "approve of fake financial planning software" that's incapable of performing all of these critical functions.

These enormous tech problems are turned into profitable opportunities when you're an RIA, because you're free to buy and use Real World personal financial software instead.

You'll also have much more job satisfaction and much more self-respect when you don't have to peddle product for a living.

When you're an RIA, you're always wearing a "White Hat." This means you can smile with pride as you tell everyone about that.

You'll also be able to sleep much better, and look yourself in the mirror, with a clear conscience when the color of your hat is always white.

_____________________________

Now you know why BDs try so hard to get you join them. Once they get you to sign up, they'll have you firmly in their spider web; and then it's very hard, if not impossible, to ever escape.

The longer you stay in this dark-side underworld, the harder it is to leave, and the more "screwed" you'll become over time.

So you should get out ASAP and become an RIA, even if that means taking a day job for a while until you can build up your book of business.

We don't have anything to do with becoming an RIA, other than being partners with a great attorney that does nothing but setting up RIAs and doing RIA compliance (see the section below his picture for his contact information).

Once you become an RIA, then we have most of the financial spreadsheets needed to actually perform your primary functions as a true professional financial adviser and/or money manager.

If you're a brand new RIA, then you also may qualify for the New Financial Planner Starter Kit.

Relevant links to learn more:

Why life insurance BDs are the worst of the bunch

About getting financial plan software approved by BD compliance

About estate planning and estate planning software

Read why you don't need to use financial planning software that ends up letting the "tax tail wag the investment dog" anymore

About becoming your own RIA.

How to Become Your Own Registered Investment Advisor

We've been working out deals for over a decade with RIA set up consultants, to find the best attorneys to help you set up your new RIA (depending on your state).

We've had one get old and retire on us, have had to fire two so far, and didn't hire one.

That was several years ago, and we've been extremely happy with our current partner. We've had zero complaints for many years now. His picture is above, and he wishes he still looked this young!

Please note that these attorney fees range from ~$1,200 for the basic RIA setup package, to over $2,500 for the "deluxe deal." So please don't inquire unless you're prepared to spend this much money within a couple of months or so.

Also, for around $1,200, existing RIAs currently registered at the SEC level can be switched to the state level.

Send e-mail to support@toolsformoney.com to get started with your free initial RIA setup and/or compliance consultation by a very experienced attorney that only does this type of work

Once you've paid our RIA setup consultant, then you'll get 10% off of everything on this site.

Then don't forget to get your free copy of the Money eBook - where all of the secret gold nuggets of vital About this industry resides.

Financial Planning Software Modules For Sale
(are listed below)

Financial Planning Software that's Fully-Integrated
(the IFP is the NaviPlan alternative for 1/6th the price)

Goals-Only "Financial Planning Software"
(the MoneyGuidePro alternative for 1% of their price)

Retirement Planning Software Menu: Something for Everyone
(the RWRs, RP, and SRP)

Comprehensive Asset Allocation Software

Model Portfolio Allocations with Historical Returns

Monthly-updated ETF and Mutual Fund Picks

DIY Investment Portfolio Benchmarking Program

Financial Planning Fact Finders for Financial Planners Gathering Data from Clients

Investment Policy Statement Software (IPS)

Life Insurance Calculator (AKA Capital Needs Analysis Software)

Bond Calculators for Duration, Convexity, YTM, Accretion, and Amortization

Investment Software for Comparing the 27 Most Popular Methods of Investing

Rental Real Estate Investing Software

Net Worth Calculator (Balance Sheet Maker) and 75-year Net Worth Projector

College Savings Calculator

Financial Seminar Covering Retirement Planning and Investment Management

Sales Tools for Financial Adviser Marketing

Personal Budget Software and 75-year Cash Flow Projector

TVM Financial Tools and Financial Calculators

Our Unique Financial Services
(are listed below)

We're Fee-only Money Managers: So you can hire us to manage your money, and/or financial advisers can hire us to manage client money, using our Model Portfolios and/or Asset Allocation Systems

Mr. Market Timer's Unique Market-neutral Stock Market Timing Services
(the hedge fund alternative)

Consulting Services: Hire Us to Make Your Financial Plan, Retirement Plan, Benchmarking Report, Whatever

Buy or Sell a Financial Planning Practice

Miscellaneous Pages of Interest
(are listed below)

Primer Tutorial to Learn the Basics of Financial Planning Software

About the Department of Labor's New Fiduciary Rules

Using Asset Allocation to Manage Money

Download Brokerage Data into Spreadsheets

How to Integrate Financial Planning Software Modules to Share Data

CRM and Portfolio Management Software

About Monte Carlo Simulators

About Efficient Frontier Portfolio Optimizers

Calculating Your Investment Risk Tolerance

About Discount Brokers for DIY Money Management

About 401(k) Plan Management

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