The market is overflowing with firms that can help an FA build an RIA, so how is riaCapitalSolutions different?
We approach your business opportunity from the perspective of a potential lender and/or buyer. We analyze the business with an eye towards making it so efficient that the breakaway team can capture and keep all of the delta between what they are currently being paid at a wirehouse, and what it actually costs the wirehouse to execute their business.
We presume you, the breakaway advisor, have personal financial goals that are at least AS important as your clients'. It is our goal to determine if by launching an RIA, instead of joining another brokerage firm, the advisor will better achieve those personal financial goals. We then set about to minimize your financial risks, lowering your opportunity cost, while not selling away too much of your financial upside.
We start by building what we call the Enterprise Valuation Report for the FA/team. The EVR is a multi-part pro forma generated from the 3 pages of questions we ask in our P&L Modeling section of this site.
We then analyze and explain every dollar that is being allocated for the build-out and projected ongoing management of your RIA, and who is paying for what (during our initial meeting).
The EVR will generate a projected EBPC (Earnings before partners' comp); call it "payout" for comparison purposes.
As a guide, we use 60% as a baseline minimum EBPC. To cut to the bottom line: it should not cost you more than 40% to run your RIA.
Our approach is to walk the breakaway advisor through the EVR, section by section, sub-category by sub-category, in order to illustrate, and choose, the optimal business model.
We then illustrate the impact a capital solution will have on EBPC so that the founders can see the short term, mid term and long term financial advantages to starting an RIA. In a perfect world? It costs the team 32% or less of every dollar to run the business, leaving at least a 68% EBPC.
Show us an EVR that looks like that and we will show you a Capital Solution that will make you look at the RIA option in a whole different light.