COMPLETE SOLUTIONS FOR HYBRID ADVISORS - Summit Financial Networks
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COMPLETE SOLUTIONS
FOR HYBRID ADVISORS

THE FLEXIBILITY YOU NEED.

BENEFIT FROM THE HYBRID APPROACH

If you are interested in the flexibility of having your own independent RIA while leveraging the resources of Summit and Cetera’s multiple clearing platforms to process your securities transactions, then Summit’s hybrid RIA solution may be right for you. You have complete platform flexibility and can choose the custodian for your clients’ RIA assets. If you don’t have a custodian, then we can help you select one that is best for you and your clients.

CURRENT CUSTODIAN RELATIONSHIPS WITH RIAS INCLUDE:

BNY MELLON

FIDELITY

JP MORGAN

PERSHING

SCHWAB

SCOTTRADE

TD AMERITRADE

TRADEPMR

LEARN MORE BELOW ON THE RIA LANDSCAPE WITH OUR

FAQS ON BECOMING A HYBRID ADVISOR BELOW.

FREQUENTLY ASKED QUESTIONS

What is the definition of a hybrid advisor?

Simply stated, a hybrid advisor is an investment adviser representative (IAR) registered with both a registered investment adviser (RIA) and a broker-dealer. This allows the advisor to maintain a commission- and fee-based practice, or what’s known as a hybrid practice.

Why would an advisor want to be an IAR?
  • Ability to offer clients both commission- and fee-based products
  • Outsource RIA compliance to the broker-dealer
  • Leverage the broker-dealer’s infrastructure and support
  • Maintain their independence
Why would an advisor want to be a hybrid RIA?
  • Ability to offer clients both commission- and fee-based products
  • Complete control over the advisory products they offer their clients
  • Maintain their independence
Is there a trend of wirehouse advisors considering alternative affiliations?

Yes. According to Cerulli Associates, the fastest growing segment of the advisor channel is the hybrid channel. Conversely, the wirehouse channel is forecasted to continue to shrink over the next several years. As more and more wirehouse brokers see themselves successfully transition to one of these models, we will continue to see the hybrid space grow.

Is this business model more profitable? Does it help develop a more robust wealth management practice?

According to the Rydex Advisor Benchmarking study, the average hybrid RIA practice makes about $30,000 more per year than the average fee-only RIA. Approximately 20-30 percent of the revenue generated by these hybrid RIAs is from commissions. One can conclude that clients are now looking for ways to access non-correlated markets, and in the hybrid model, there is access to the broker-dealer’s lineup of commission-based alternatives, which clients can use.

What is the cost to starting your own RIA?

To form an RIA, the cost can range from $5,000 – $10,000, depending on whether you use a consultant. This however, does not include the time needed to smoothly run the RIA. There will be intangible costs that include non-client related issues, such as creating ADVs, writing wrap brochures, dealing with outside auditors, developing written supervisory procedures, maintaining a code of ethics, performing continuity planning and hiring a chief compliance officer.

Are there any disadvantages to starting your own RIA?

There are several disadvantages to starting your own RIA, including the upfront costs to starting the RIA and the ongoing costs to maintain your RIA. In addition, you will not have the luxury of relying on a corporate RIA when handling all the potential issues which arise when dealing directly with the SEC.

If I want to be dually registered, what broker-dealer would be a good fit?

You should be looking for a broker-dealer that embraces the hybrid RIA relationship and doesn’t try to get you to use their RIA platform. Only you know what’s best for your clients—not your broker-dealer. In addition, you should look for a broker-dealer that can provide a high level of support from compliance, technology and practice management with a culture which matches your firm’s.

What are the challenges with being a hybrid RIA?

Your broker-dealer should be able to service your particular business model based on where you decide to custody your clients’ assets. You should speak with other advisors that are dually registered at that firm to make sure they support those advisors and do not try to influence them to pick their RIA platforms. Lastly, make sure the broker-dealer will be able to supervise your RIA business on the custodial platform that you choose.

Compare the Different Hybrid RIA Models

Advisor Options

IAR of IBD

Hybrid RIA

Advisor Options

ADVISOR PROFILE

IAR of IBD

Advisor does commissions-based business and is not fee-only.

Hybrid RIA

Advisor does commissions-based business and is not fee-only.

Advisor Options

STATUS

IAR of IBD

Advisor is independent contractor of IBD

Hybrid RIA

Advisor starts or joins an independent RIA and is an independent contractor of the IBD

Advisor Options

REGISTRATION

IAR of IBD

Advisor is a Registered Representative with the IBD and an IAR with the IBD's corporate RIA

Hybrid RIA

Advisor is a Registered Representative with the IBD and and IAR of the independent RIA

Advisor Options

COMMISSIONS

IAR of IBD

IBD fee schedule applies to brokerage business

Hybrid RIA

IBD fee schedule applies to brokerage business

Advisor Options

CUSTODY

IAR of IBD

IBD chooses the custodians for both advisory- and brokerage-based client assets.

Hybrid RIA

Advisor can choose the custodians for advisory client assets and IBD chooses the custodians for brokerage-based client assets.

Advisor Options

COMPLIANCE

IAR of IBD

IBD manages all functions, including both advisory and brokerage business.

Hybrid RIA

Advisor is completely responsible for advisory business functions; IBD is responsible for brokerage business and has some supervisory responsibility for advisory business.

Advisor Options

PRODUCTS

IAR of IBD

IBD manages both the brokerage and advisory products.

Hybrid RIA

IBD manages the brokerage products, advisor must select all advisory products.

Advisor Options

TECHNOLOGY/SUPPORT

IAR of IBD

IBD provides infrastructure and support across both brokerage and advisory business.

Hybrid RIA

IBD provides infrastructure and support to brokerage business and advisor must select vendors for advisory business.

Learn more about Summit’s approach to RIA Services.

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