Destination RIA: What to Expect and How to Prepare for … · 2020. 10. 19. · The Evolving RIA Landscape “The RIA opportunity, whether starting your own frm or joining an existing

Destination RIA What to Expect and How to Prepare for Independence

In collaboration with

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2

6

6

Contents

Executive Summary

The Evolving RIA Landscape

An Introduction to Independence

The Benefts

Why Did You Start an RIA

From Employee to Owner

Regulatory Environment

Products and Services

Organizational Structure and Staffng

Operations and Technology

NetX360 Technology Solutions

A Closer Look

Understanding the Economics

Comparison of RIA and Wirehouse Economics

Choosing the Right Fit for You

Range of Business Model Options

Making the Transition

Sample Transition Timeline and Checklist

Sample Strategic Plan

Legal Compliance and Risk Management

Client Communications

Custodian Transition Support

Sample TransitionClient Service Team From Pershing

Sample Transition Process From Pershing

Is It Right for You

Three RIA Success Stories

Archford Capital Strategies

6 Meridian

Delphi Private Advisors

7

8

9

10

11

12

12

13

13

14

15

16

17

18

19

21

22

23

23

24

25

26

26

27

28

Executive Summary ldquoThis has unquestionably been a better place for us What wersquove been able to bring to the table for our customers as an independent RIA far exceeds what we were able to do in the past both in the quantity of services we can provide and the overall quality of themrdquo ndash Jim Maher Founder and CEO Archford Capital Strategies

Financial advisors have more options than ever before when it comes to serving their high-net-worth clients The range of service models platforms support services technology solutions business partners and fnancing options available to them has never been greatermdashand yet more advisors are choosing the Independent RIA model In fact today nearly twice as many advisors serve their clients from an Independent RIA than just 10 years ago1

Why is that Primarily the trend toward RIAs is driven by investor demand Investors perceive a fee-only billing model to be more transparent understand that the commitment to fduciary duty refects their best interest and increasingly seek a high level of individualized service and comprehensive fnancial planning advice Independent RIAs are well-positioned to deliver on these expectations Individual investor assets managed by RIAs have never been greater and the numbers continue to grow2

RIAs and Investor Asset Growth

2005 135 of investor assets were held by RIAs


28 of estimated investor assets will be held by RIAs 2020e Source Cerulli Associates US RIA Marketplace 2016 Intermediary Quant Report 2015

Advisors also recognize the entrepreneurial benefts this business model provides Many have come to see the extraordinary opportunity that comes with the fexibility of working to serve clients in a manner that also aligns with advisor preferences They feel the independent model empowers them to create a business that matches their vision and provides the freedom to give their clients exactly what they want and need

This whitepaper lays out the most recent trends that are defning the Independent RIA space and illuminates key factors that any individual or team should consider while making this career-defning decision We share the stories of three RIA teams who found success using this path while identifying best practices that helped facilitate their transition processes This whitepaper will also help you understand how custodians like BNY Mellonrsquos Pershing Advisor Solutions in partnership with other industry experts can help facilitate your move to a new business model There are many options and resources available to help you navigate these complex waters The better a fnancial advisor understands the destination and the path to get there the smoother the journey will be

1 Cerulli Associates US RIA Marketplace 2016 A comparison of 2015 to 2005 including Independent RIAs and Hybrid RIAs an Independent RIA with some assets held at an IBD

2 Cerulli Associates Intermediary Quant Report 2015

Destination RIA What to Expect and How to Prepare for Independence 1

The Evolving RIA Landscape ldquoThe RIA opportunity whether starting your own frm or joining an existing frm has never been greater By moving from lsquoprofessional sellerrsquo to lsquoprofessional buyerrsquo more and more advisors have been able to deliver on the promise they make to their clients every dayrdquo ndash Mark Tibergien Managing Director and CEO Pershing Advisor Solutions

The Independent RIA business model is more attractive than ever Even as other retail advisory channels contract and consolidate there have never been more fnancial advisors enjoying the benefts of independencemdashand they are serving more clients and managing more total assets than ever before

Total Advisors by Channel | 2005 ndash 2020e

22700

8200

29000

18000

33100

26500

38000

27000

Total 30900 2005

Total 47000 2010

Total 59600 2015

Total 65000 2020e

Independent RIA Hybrid RIA

Source Cerulli Associates US RIA Marketplace 2016 Intermediary Quant Report 2015

Note Hybrid RIA is an Independent RIA with an IBD Affliation Does not include advisors using a Corporate RIA at an IBD

In 2015 Independent RIAsmdashincluding hybrid RIAs which are Independent RIAs with a broker-dealer relationship that maintains commissioned businessmdashmanaged $38 trillion of retail client assets3 This is the equivalent of 233 of all fnancial advisor assets in the United States The momentum is so great in fact that Cerulli expects the proportion of Independent RIA assets to increase to 28 by 2020 up from only 135 in 20054 The growth in number of advisors choosing the RIA business model is even greater At the end of 2005 there were approximately 31000 advisors at Independent and Hybrid RIAs and in just 10 years that number nearly doubled to close to 60000 in 2015 At the same time total advisors in the US declined from 350000 to 3100005 Itrsquos a trend that is expected to continue into the future

3 Cerulli Associates US RIA Marketplace 2016 4 Cerulli Associates US RIA Marketplace 2016 5 Cerulli Associates Intermediary Quant Report 2015

2

Why are many advisors moving to the RIA model Recent research from Cerulli Associates illuminates the top benefts fnancial advisors have cited for choosing to go the independent route Perhaps it is not surprising that economic factors are found at the top of this list including the opportunity to build value in the business When building an RIA frm client relationships and the value you drive from those relationships are inherently yours Advisors working at other types of frms report that having to share revenues with the home offce can be a source of dissatisfaction Thus another economic factor high on the list is the level of advisor income offered from the frm revenues generated At an RIA the compensation is effectively 100 and the professional owner(s) decide how much revenue to invest back into the business pay to their staff or take out of the business as profts

Also prominent on the list are factors that focus on providing the best possible client servicemdashsuch as autonomy in how they serve clients access to the best technology freedom of investment choices and meeting client preferences for using an Independent advisor In fact half of the top reasons advisors choose the Independent route focus on client service Whether it is accessing products purchasing investment solutions on behalf of clients or designing the ideal client experience advisors may feel they are better able to serve their clients in an RIA environment In addition several key items on the list are directed toward advisory lifestyle Autonomy certainly pertains to client service but also to ways of doing business and important lifestyle decisions of how and when an advisor chooses to work

Finally workplace culture is also a huge contributor to personal satisfaction and more than half of advisors who prefer an Independent model cited culture as one reason why The team structure is often the DNA that defnes the culture and the frm The design of the team unlocks powerful doors and enables frms to compete and grow talent

Is it a business model or a value proposition for clients In many ways the Registered Investment Advisor has become the gold standard in the industry for client service Advisors at wirehouses and Independent Broker-Dealers (IBDs) have witnessed a shift within their own frms to the fee-based advice offered by RIAs In an effort to emulate this

Factors That Infuence Advisorsrsquo Desire for Switching to the Independent Model 2015

Percent Citing Reason as a Major Factor

67

64

63

54

43

39

33

Ability to build fnancial value in an Independent business

Greater autonomy

Higher payout

More personable culture

Ability to select preferred technology systems

Appeal of Independent model to clients

More control of investment decisions and portfolio construction

Note Respondents include employee advisors (wirehouse bank BD insurance and regional) who prefer the IBD RIA or dually-registered channels

Sources Cerulli Associates in partnership with the Investment Management Consultants Association WealthManagementcom the Financial Planning Association and OnWallStreet

Source The Cerulli Edge Advisor Edition Q4 2015

model in the eyes of clients fee-based offerings have been rolled out along with advisor titles that have in many cases been changed to sound less like a broker and more like an RIA These programs now account for an estimated two-thirds of advisor compensation at the wirehouses and nearly half at large broker-dealers6 At frst glance many of these offers appear similar to how an RIA functions However when you look beyond the fee-based billing there is a big difference A fnancial advisor at an RIA is subject to fduciary duty ensuring that clients receive the advice and products that are in their best interest Many advisors feel that if theyrsquore doing the work of an RIA and the relationship looks more like that of an RIA why settle for less as an employee In addition many individuals who switched frms over the past few years will see their retention contracts expiring so it is natural to begin looking aroundmdashespecially if there are currents of dissatisfaction

6 Cerulli Associates US Advisor Metrics 2016


Today more advisors are making that transition The path to building an RIA is well trodden and many feel it involves a far lower risk than it once did More support services are available from custodians such as Pershing Advisor Solutions or platform providers such as Dynasty Financial Partners or HighTower These partners have the knowledge to help advisory teams navigate departures along with a stable of technology and services to get things up and running more quickly Some frms such as Live Oak Bank are also providing fnancing for teams moving to Independent RIAs This helps close the gap on the initial fnancial impact of setting up an independent frm versus joining a competing brokerage and gathering a considerable upfront compensation

Is founding a frm the only way to play Another option that leverages this evolving industry structure is joining a frm already under the umbrella of an established player sometimes referred to as a strategic aggregator While this option is growing considerably the majority who go Independent still do so without one of these partnersmdashseeing that custodian support and off-the-shelf technology and solutions make it easier than ever to set up a functioning offce quickly Advisors who have considered the move in the past may want to take another look as the landscape continues to evolve In a matured industry the process of setting up an RIA often involves less work and uncertainty than it has in the past There are a range of potential solutions with varying degrees it is a matter of choosing the right ft for you

Supporting the trend of more RIA advisors in the marketplace is a robust level of acquisition activity ldquoRIA MampA activity and breakaways joining RIAs continued at a record pace in 2016rdquo said David DeVoe Managing Partner at DeVoe amp Company He continued ldquoMany advisors who are leaving wirehouses at record levels are choosing to join RIAs as their path to independencerdquo

This growing MampA momentum illustrated in the graph below is due in part to the turn-key aspect of joining an RIA you can start serving clients on day one This path cuts out the need to set up a new business register the RIA buy the printer and hire the admin The advisor simply shows up at the offce and the business is ready to go The number of brokers and advisors who chose to join RIAs as they broke away from wirehouses has been steadily increasing In 2016 a total of 64 lsquobreakawaysrsquo with over $100M in AUM joined RIAs nearly three times the 22 teams that did so back in 2013

RIA MampA Activity and Breakaways Joining RIAs Transactions Are Increasing at Record Pace

150

120

90

60

30 Breakaway Deals 0 Established RIAs

37 42

76 7822

49

56 64

2013 2014 2015 2016

Source DeVoe amp Company RIA Deal Book Fourth Quarter 2016

This growing migration of brokers joining RIAs is only part of the story the primary route for advisors choosing the Independent RIA model is founding their own RIA As shown on the next page Cerulli Associates reported in 2015 that 325 of transitioning advisors preferred to found a new Independent RIA on their own while 253 preferred to start a frm with another advisor or advisors The remaining advisors were either large enough to join an existing RIA frm as an owner (337) or intended to join an independent frm as an employee (84) Regardless of the path chosen by any advisor the outcome is clear Each year more advisors are voting with their feet that the Independent model is better for them and their clients

4

How can I build something of value The record level of RIA MampA activity underscores another important point The value of the independent business In 2016 78 established RIAs were acquired by another RIA or industry player a considerable increase from 2013 (see chart on previous page) Most advisors donrsquot start their RIA with a future sale of the business as top of mind But the potential sale of the business in the future is a key beneft of being an owner of an RIA Ultimately RIA owners can be appropriately rewarded for their hard work and the sustainable organizations they built through either an external or internal sale Banks consolidators private equity frms and other RIAs are acquiring RIAs in record numbers And there are a variety of ways to sell equity to internal staffmdashespecially if you start early Whether passing on ownership to the next generations of leaders at your frm or integrating your business into a well-established enterprise the value for owners can be exceptional

Advisorsrsquo Preference for Switching to the RIA Model 2015

337

325

253

84 Join an existing firm as Start a new firm with an owner of principal another advisor(s)

Start a new firm Join an existing firm on my own as an employee

Sources Cerulli Associates in partnership with the Investment Management Consultants Association Wealth Managementcom the Financial Planning Association and OnWallStreet

Note Respondents include advisors from wirehouse regional IBD bank BD and insurance channels who prefer the RIA or dually-registered channels

While industry momentum has never been stronger the Department of Labor ruling on fduciary duty has thrown one wild card into the mix Itrsquos uncertain at publishing whether the ruling will be implemented and in what form Even when implementation seemed all but certain surveys showed that most advisors in the industry believed it only made the RIA model more attractive7 RIAs already subject to the SECrsquos fduciary standard are likely better prepared to implement the requirements of the rules Furthermore for advisors who havenrsquot made the leap to independence the hurdle is now much lower What isnrsquot changing is that the fduciary standard that Independent RIAs are held to is appealing to sophisticated consumers This topic is covered in greater detail in the Regulatory Environment (page 9) section

The industry evolution and trends surrounding RIAs only tell part of the story The rest of this paper is organized to give you a much deeper sense of the related opportunities at hand In An Introduction to Independence (page 6) we cover key distinguishing factors of the RIA model including business characteristics and regulatory framework We provide a more detailed review of the benefts of this business model explore the dimensions of an RIA frm and underscore the responsibilities of an owner-advisor from building and managing an organization to setting up a technology infrastructure

In A Closer Look (page 13) we detail the fnancial dimensions of the business and look at transitioning to an RIA frm This section gives a greater idea of the earning potential of this alternative business model where the equity value of the frm at exit cannot be ignored We also look at some important distinctions between different opportunities in the RIA spacemdash from starting a new frm to engaging with existing frms and infrastructure alternatives We also explore considerations for making the transition including the steps to take and how to communicate the changes to clients

Will my clients come with me Itrsquos a natural fear of making the leap and one that time and time again has been managed successfully by taking careful steps in communicating with clients This section ends with a review of the resources available from sophisticated custodians including Pershing Advisor Solutions

Finally in Three RIA Success Stories (pages 26-28) we share in-depth profles of three teams that have founded RIAs over the past several years Wersquoll introduce their stories in the next part of the paper while sharing their collective wisdom throughout These stories and deep insights will provide you with helpful considerations while outlining the benefts of founding or joining an RIA frm

The role of this paper is to educate provide perspective and share the wisdom from other RIA frms that have gone through the transition This should provide you with the framework you need to begin to develop a well-thought-out strategy so you can feel confdent in making this critical life decision

7 Cerulli Associates US RIA Marketplace 2016


An Introduction to Independence ldquoThe support and encouragement we received from clients once we made the move was extraordinary Every client wanted to understand more fully the rationale for leaving the wirehouse and starting our own frm but once we told the story and communicated our confdence and excitement the vast majority of clients agreed immediately to move with usrdquo ndash Andrew Mies 6 Meridian Founder and CIO

The Benefts

When you look at the numbersmdasha doubling of Independent RIA advisors in 10 yearsmdashitrsquos logical to ask ldquowhatrsquos driving this movementrdquo While all advisors have individual reasons for making a move here are some common themes wersquore seeing

FreedommdashIf therersquos one beneft to independence itrsquos the freedom to control your own destiny This freedom not only includes creating the frm yoursquove always wanted but choosing a work balance and lifestyle that suits you best For every decision made for you as an employee or dictated by a more restrictive business model you can create a frm that approaches business your waymdashthe way you want to work to best serve your clients Yoursquore working for yourself that means you get to choose when you spend time in the offce when you work remotely or how you prioritize family and friends The way you manage your staff and provide for your support is up to you For new advisors a more structured environment can serve as a valuable training ground while more seasoned advisors may no longer need that structure and may prefer to do without

OwnershipmdashWhen you own a business the time and effort you put into that business is creating something of value Many Independent advisors who exit their businesses at some point down the road are deriving substantial value from them In fact acquisition activity is at an all-time high8 As an owner you can create a succession plan that suits your needsmdash whether that means sharing ownership with partners and staff or preparing your frm for an eventual sale Itrsquos up to you to create the legacy that ensures the ongoing care for your existing client relationships as well as your colleagues In the meantime the rewards of ownership may simply mean retaining 100 percent of the revenue your business generates while controlling how that revenue is spent on client service staff take-home pay and reinvestment in the business

ClientsmdashMany advisors who choose the RIA model often do so for the sake of their clients The standard that RIAs are held tomdashacting as a fduciary of the clientmdashmeans theyrsquore obligated to serve in the clientrsquos best interest Many advisors who choose independence were already living up to that standard but found themselves restricted in the products and services they could offer clients Being Independent means freedom to choose the products services and business methods that best suit your clientsrsquo needs As an RIA you are paid a fee directly by the client thatrsquos not directly tied to the solutions you choose on their behalf but rather to the advice yoursquore providing

Many advisors and advisor teams specialize in clients with needs that have grown beyond the generalist capabilities of a wirehouse Business owners executives sports personalities or divorcees may require business approaches that are impossible to manage in the ldquoone-size-fts-allrdquo broker model Something as simple as client reporting may need to be customizable

As an RIA calling your own shots yoursquore not limited in how you can reach out to potential new clients Many newly-Independent advisors feel exhilarated by the variety of new options available to them for reaching prospects whether through professional referral relationships charitable or community organizations and board work or print and radio spots You get to guide your outreach by effectiveness rather than be limited by ldquothe rulesrdquo

8 DeVoe amp Company RIA Deal Book Fourth Quarter 2016

6

Reduced ConfictmdashEmployee advisors working in an investment solutions-oriented atmosphere often feel justifably dissatisfed with having to share the revenue they generate with their employers They also may not like the range of products available to them or may question the benefts they receive in return for the revenue haircuts and fees they have to contend with Many advisors fnd the culture of their current frm to be lacking and feel they can do far better

Ability for Business ImprovementmdashAt one time or another every advisor who chooses to go Independent has had an idea about how things could be done better They may have better ideas about investing better sources for lending other business partners in the mix or know of technology solutions more suited to their business strategy Instead of being restricted when it comes to these options Independent advisors get to choose the mix that best meets their business needs as well as their clientsrsquo needs While most RIAs emphasize fee-only pricing some Independent RIAs choose to maintain some commission-based business Firms that also have a relationship with an Independent broker-dealer are referred to as hybrid frms


We interviewed founders of three RIA frms while developing this paper to gain additional context and wisdom for advisors or teams considering making a similar transition Upon asking ldquoWhat made you start an RIArdquo herersquos what the following frms had to say Full frm profles are included at the back of this whitepaper (Three RIA Success Stories pages 26-28)

Jim Maher Founder and CEO of Archford Capital Strategies emphasized the importance of creating a unique and customized offering for his clients His team left a wirehouse environment in 2013 with the primary objective of accessing the products and services they believed would best serve their clients With a focus on clients who own private businesses he was looking to address the needs of individual owners and their families while addressing their specifc business needs in ways that a generalist product set couldnrsquot As Mr Maher put it ldquoWe no longer sell products or servicesmdashwe help customers purchase them Wersquore able to go anywhere and source solutions for these customers and that has really been the paradigm shift for memdashto fully understand where I can put myself today to help these peoplerdquo

Two founders of another RIA frm Delphi Private Advisors shared similar sentiments Keith McKenzie and Darren Reinig discussed their frmrsquos beginnings with us along with what they hoped to accomplish when they set out Founding the frm in 2009 in the midst of the fnancial crisis was a challenge They had no established client base but had conviction about what their ideal frm should look like Mr McKenzie said ldquoWe started with a philosophy and a vision around how money should be managed and then went out and tried to fnd a way to express that in a frmrdquo He continued asking ldquoHow do you make decisions inside the frm with an investment committee and a process so that every client gets the best thinking the frm has to offerrdquo As they surveyed the landscape of existing frms they didnrsquot see anyone using the approach they envisioned

Margaret Dechant and Andrew Mies are two of the founding partners of 6 Meridian Having exited a wirehouse in 2016 the team is in some ways at the beginning of a journey even though theyrsquove been laying the groundwork for many years During our conversation Ms Dechant and Mr Mies emphasized launching the frm with a focus on the client but also described another important dimension of their interest in making the change They recognized the potential for greater satisfaction in knowing their work efforts were building something of value for the frm members rather than some large business entity As Mr Mies pointed out ldquoYou get to a size and you run the business as we did it was important for us to become business owners as opposed to just employees at the wirehouserdquo He added ldquoBefore we felt like we were the ones building value inside the business but for someone else Now our efforts and our work accrue to usrdquo



ldquoThere is a mind shift in founding an RIA and Irsquove seen it and felt it in all of our teams Now we really own and are accountable for what we domdashboth for our clients and for ourselves Itrsquos an exciting feeling to take responsibility for how we continue to grow and evolverdquo ndash Margaret Dechant Founder and CEO 6 Meridian

Advisors transitioning from employee to owner inevitably discover a broad range of additional responsibilities demanded by their new frm While these responsibilities present a fantastic opportunity to create the frm of their dreams itrsquos important for advisors contemplating this transition to understand the full scope and impact of the change

According to research published by Cerulli Associates9 there are differences in how advisors at wirehouses spend their time versus those at RIAs the key difference is additional time dedicated to administrative activities Where a wirehouse advisor spends an average of 17 of their time on administration an RIA advisor spends 24 of their time in this area Wersquore talking about things like offce administration offce management and frm operations No matter where you are advisors spend roughly half their day serving clients (However it should be noted that time allocated to client service decreases slightly after establishing an RIA Time spent on investment management also may decline somewhat)

Common Areas of Responsibility When Independent

Business Planning and Strategy bull Choosing partners in creating your frm bull Providing strategic leadership and vision for the frm

and renewing frm strategy and priorities on a regular basis

bull Defning your client service and product offerings determining pricing for services

bull Developing your approach to marketing and business development

bull Evaluating and selecting business partners across all functional areas of the business such as custody legal compliance investing and lending

bull Overseeing administration of frm capitalization and fnances

Organization and Staffng bull Determining an organizational hierarchy hiring team

members defning roles and setting compensation structure and level

bull Creating a frm culture to attract the talent yoursquore looking for bull Establishing a system for reviewing performance

providing feedback and giving employees meaningful career paths

bull Incorporating governance structure as frm ownership grows

Operations and Client Service bull Outftting and opening an offce that allows you to

conduct business bull Determining the technology platforms and systems

to be used by the frm and whether any of them will be outsourced to third-party providers

bull Overseeing the day-to-day client experience staff management and frm operations

bull Establishing a compliance system that meets all legal and regulatory standards

Of course different frms may allocate these responsibilities to different leaders within the organization depending on circumstances Many frms divide these responsibilities among the partners while others designate a COO or administrative partner to take the lead on many of these management tasks

However you decide to manage the range of needs of the business itrsquos important to understand the full scope of these responsibilities while understanding that many of these decisions may need to be made before breaking away from an existing employer The range of requirements needed for setting up a new frm also shines a light on a key beneft of joining an existing frmmdashan already established frm infrastructure


8


ldquoBy going Independent we no longer sell products or servicesmdashwe help customers purchase themrdquo ndash Jim Maher Founder and CEO Archford Capital Strategies

A key difference in the way RIAs and broker-dealers approach their client relationships lies in the how these organizations are regulated RIAs are primarily governed by The Investment Advisers Act of 1940 which defnes these frms as ldquoengaging in the business of advising others either directly or indirectly of the value of securities or of the advisability of investing in securitiesrdquo So the focus at RIA frms is on providing investment advice and their fees are typically tied to the provision of that advice From this distinction stems the standard of care they are beholden to in working with clients RIAs must act as a fduciary in the advice they provide meaning they must always act in the best interest of a client

In contrast wirehouses and other broker-dealers are governed by a completely different piece of legislation and a different regulatory structure The Securities Exchange Act of 1934 governs broker-dealers and their registered representatives and the focus is on the buying and selling of securities Under this legislation the delivery of advice must be considered incidental to the buying and selling of securities and any fees must be associated with the transaction and not in remuneration for the advice

When it comes to offering products registered representatives are held to a standard in which products should be ldquosuitablerdquo for the client but may not be necessarily in their best interest Many different products might be suitable and there is little to prevent the broker from selling a product with a higher fee even if it provides no greater beneft

The Securities and Exchange Commissionreg (SEC) has responsibility for oversight of Registered Investment Advisors over $100M in assets whereas those with fewer assets are regulated by the states By contrast broker-dealers are regulated by the Financial Industry Regulatory Authority (FINRA) an industry group that acts as a Self-Regulatory Organization (SRO) A fnancial advisor acting as an RIA may be required to pass the Series 65 exam depending on the state where the advisor is domiciled andor where clients are located Many choose to get additional designations such as the Certifed Financial Planner (CFP) or Chartered Financial Analyst (CFA) If an RIA wants to continue to do business with a broker-dealer the Series 7 along with the Series 66 can be an alternative

An important difference between running an RIA and working at a broker-dealer is increased responsibility for oversight and compliance Whereas a broker-dealer has the responsibility of oversight for their registered representatives an Independent RIA has responsibility for a set of activities to remain in compliance with the law As a key step toward establishing an RIA any advisor should investigate the licensing registration and compliance requirements in their state and also at the federal level Legal teams dedicated to supporting fnancial advisors (such as MarketCounsel) can help in establishing RIAs Custodians such as Pershing Advisor Solutions can also help in identifying the appropriate third parties to help navigate these requirements

In a 2016 article in The Wall Street Journal Antoinette Schoar chair of the fnance department at the MIT Sloan School of Management wrote about her research on fnancial advisors and offered evidence that validates the importance of fduciary duty10 After sending ldquomystery shoppersrdquo to consult with a range of fnancial advisors in the Boston area the study found a highly variable quality of advice and that advisors often failed to correct investor misconceptions about investing Importantly the study also found that advisors with fduciary duty provided ldquobetter and less biased advice than those merely registered as brokersrdquo

The Department of Labor ruling on fduciary duty has the potential to shake up the marketplace and has been a topic of some debate and consternation in recent years Potential changes may affect broker-dealers more than RIAs and are primarily directed at retirement accounts Even as the shifting political landscape in Washington has injected considerable uncertainty about implementation of these measures many frms are already nearing completion of implementing plans for new business practices and even marketing those changes The fnal equilibrium and impact on the industry may take years to play out

10 Antoinette Schoar ldquoWe Put Financial Advisers to the Test ndash and They Failedrdquo The Wall Street Journal October 27 2016



ldquoWe believed that being a boutique and then working with the best of breedmdashwhether itrsquos custodians banking solutions investment managers or the fexibility that you have as an RIAmdashyou can just deliver a better solutionrdquo

ndash Darren Reinig Founder and CIO Delphi Private Advisors

At frst many advisors moving to the RIA model have concerns that the product selection at their prior wirehouse or IBD will no longer be available However the reality is that advisors transitioning to the RIA model have a much wider selection of products available than they did previously Whereas they once had one or two options for a given product they discover an entirely new universe of options available to them In fact product availabilitymdashespecially for alternatives lending insurance and other types of products that are typically limited to a proprietary selection at wirehousesmdashis a key motivator for some teams to make the RIA move As you will see from the frm profles included at the back of this whitepaper the range of products that some clients have found far surpasses what was available to these advisors in their old environments

When transitioning your business to a custodian you may encounter products that are not available such as a particular separate accounts manager If that happens the custodianrsquos investment products team works with you to fnd a range of appropriate substitutions

In addition to fnancial products most custodians offer a host of business support services and solutions to help you serve your clients and support the growth of your frm Pershing Advisor Solutionsrsquo wealth solutions for investors are designed around these overarching goals Growing Wealth Protecting Wealth Leveraging Wealth and Transferring Wealth Some of these solutions are used in different ways at different stages of a clientrsquos journey However all are carefully chosen to support the spectrum of high-net-worth (HNW) goals

Client Objectives Sample Wealth Solutions

Growing Wealth

Protecting Wealth

Leveraging Wealth

Transferring Wealth

bull Alternative investments network bull Access to leading institutional money managers bull Third-party investment management bull Foreign exchange currencies bull International investing

bull Cash management vehicles bull CDs and CDARs bull Fixed-income investments bull Structured products bull Tax-managed investing bull BNY Mellon insurance solutions bull Custody choice

ndash Brokerage custody through Pershing LLC ndash Bank custody through BNY Mellon NA

bull Liquidity Solutions ndash LoanAdvancereg (Non-purpose lending) ndash CreditAdvancereg (Margin) ndash Private banking through BNY Mellon NA

bull Investment Credit Line (ICL) bull Hybrid mortgages bull Construction fnancing bull Interest-only and 100 fnancing options

bull Access to corporate trustees bull Donor-advised funds (DAFs)

For more information visit pershingcomwealth or consult with your business development offcer or relationship management offcer at Pershing

Bank custody and private banking solutions are provided by BNY Mellon NA member FDIC a wholly owned subsidiary of The Bank of New York Mellon Corporation Except with respect to uninvested cash held in a bank deposit account chosen by client as part of a sweep election assets custodied at BNY Mellon NA are segregated from the general assets of BNY Mellon NA Credit and mortgage services are subject to application and credit approval


ldquoThe talent requests that wersquove had to join our team have never been at a higher level and so we just bought another building for our operations Itrsquos being set up more like a technology companymdashvery open with the work spaces treadmills those types of things Not traditional because wersquove found the millennial employee is looking for something differentrdquo ndash Jim Maher Founder and CEO Archford Capital Strategies

Whether yoursquore considering starting a new frm or joining an existing one itrsquos important to understand the staffng and organizational challenges of running an RIA Human capital in terms of building a frmrsquos team is the single largest expense for an RIA frm The 2016 InvestmentNews Financial Performance Study of Advisory Firms indicated that on average 487 of a frmrsquos revenue is spent on staff compensation for owners non-owner professionals and administration and support staff The frmsrsquo organizational structure and staffng levels are key decisions for any new RIA ownermdashalong with determining roles and responsibilities compensation level incentive plan structure and benefts packages

As a sponsor of the 2016 InvestmentNews Financial Performance Study of Advisory Firms as well as the 2017 InvestmentNews Compensation and Staffng Study of Advisory Firms Pershing is dedicated to providing quality information to advisors to make critical business decisions This section includes a few highlights from those studies but we invite clients to access the complete studies for full information on the organizational structure and staffng practices of Independent advisors

The table below shows a typical level of staffng and certain key metrics for three different categories of frms

bull The Ensemble is a frm with at least two professionals typically with supporting staff and up to $5M in annual revenue bull The Enterprise Ensemble is a multi-professional Ensemble frm with $5 to $10M in revenue bull The Super Ensemble is a multi-professional Ensemble frm with over $10M in revenue

FIRM METRICS (Median Values Shown)

ENTERPRISE SUPER ENSEMBLE ENSEMBLE ENSEMBLE

Assets Under Management (AUM)

$183M $1058M $2077M

Total Revenue $1424000 $7567000 $15374000

Active Clients 207 600 707

STAFF CATEGORY AND HEADCOUNT

ENTERPRISE SUPER TYPICAL POSITIONS ENSEMBLE ENSEMBLE ENSEMBLE AND COMPENSATIONS

Management mdash Executives and Owners

10 30 40 Managing Partner CEO $155-395K Practicing Partner $160- 302K

Non-Owner Professionals mdash Advisors

20 70 160 Lead Advisor $100-192K Service Advisor $63-105K

Non-Owner Professionals mdashInvestment Managers

20 40 Senior Portfolio Manager $85-160K Research Analyst $60-89K

Support Staff 10 60 130 Support Advisor $50-71K Client Service Administrator $42- 59K

Administrative Staff 10 40 90 Executive Assistant $42-70K Administrative Assistant $35-47K

50 220 460 Total Positions

Notes Compensation range shown is 25th ndash 75th percentile for a national population of RIA frms Headcounts are frm median in each category and do not sum to median total positions Owner compensation does not include ownership income See studies cited for more details

Sources Firm metrics from 2016 InvestmentNews Financial Performance Study of Advisory Firms Compensation ranges from 2015 Investment News Compensation and Staffng Study of Advisory Firms




ldquoTechnology is going to be your differentiator It has the potential to open up a big landscape of opportunity for yourselves and for your clients Moving from a prescribed environment where therersquos just one way to view things any new RIA needs to invest the time to really decide what they need from their technologyrdquo

ndash Margaret Dechant Founder and CEO 6 Meridian

ldquoSomebody today thatrsquos looking at setting up a frm I would advise themlsquoKeep your eyes really open regarding technology Do a lot of due diligence and talk to a lot of people that have experienced using the technology to determine the best path for where you want to take your companyrsquordquo


Technology and business operations stand at the core of any RIA frm These integrated systems are the infrastructure for the business enabling the team to deliver a consistent and effcient client experience Advisors coming from a large established frm typically have had technology provided for them Sometimes those systems didnrsquot do everything the advisor wanted but he or she also didnrsquot have to worry about selecting operationalizing and maintaining them There is an incredible amount of freedom in choosing the technology that will support the kind of frm you want to create At least initially however getting the right solutions in place can seem a bit daunting

Sophisticated custodians can be an excellent source of information and advice in making these technology decisions Not only do custodians partner with technology providers to supply solutions they can also provide information and advice on available third-party systems and best practices for using them (see sidebar for the capabilities within Pershingrsquos NetX360reg platform including third-party solutions) Custodians can also put advisors in touch with others who have successfully used a range of appropriate technology solutions hone in on those colleagues who are using the specifc solutions you are considering for use case scenarios to confrm what may work best for your frm There is work to be done but fnding the right technology solution shouldnrsquot be a stumbling block for any would-be frm founder Furthermore the availability of outsourced solutionsmdashwhere it is not just a part of the system provided but a whole end-to-end solutionmdashis greater than ever before

Despite what technology providers may want you to believe there is no single ideal solution The ideal technology solution for your business should be driven by your frmrsquos strategy and the client experience you want to create Whether the fnal system is high-touch or high-automation turnkey or customized local or national the strategic decisions you make will have a strong bearing on the systems that are right for you The optimal operational environment will come together only after a suffcient level of planning research refection and thoughtful decision-making

bull CRM bull Financial planning bull Mobility bull Client onboarding bull Portfolio management bull Reporting and analytics bull Third-party integration

Market Data and News bull Economic Overview powered by

Interactive Data Corporation bull Market-Q powered by Interactive

Data Corporation bull Thomson Reutersreg News and

Commentary bull Dow Jones News Servicereg

bull Security Digest Investment Portal

Research bull Argusreg Research bull Convergex Group bull Credit Suissereg Research bull Market Edgereg

bull Morningstarreg Fund Analytics bull The Ranking ServiceTM

bull The Research Alliance bull Standard amp Poorrsquos MarketScopereg

Advisor bull Thomson Reuters Investor Tools

Tools bull Albridge Wealth ReportingTM

bull Black Diamond Performance ReportingTM

bull e-Document ExpressTM

bull Ebix SmartOffce bull Equifax Decision Powerreg

bull MoneyGuideProTM

bull Morningstar Advisor WorkstationSM

bull Morningstar Portfolio X-Rayreg

bull Morningstar Annuity Intelligence bull Morningstar Portfolio Builder bull NaviPlanreg

bull Redtail Client Relationship Management

bull Salesforcecom bull Wealth2kreg Income for Life Modelreg

12

A Closer Look


The economics of an RIA frm are very different particularly from the perspective of an advisor-owner Rather than receiving a share of client revenues typically generated as a regular paycheck you will receive 100 of those revenues directly into the accounts of your frm As you are in control of running your own frm there are a range of expenses to cover but any revenue that remains can be extracted by you and your partners or reinvested in the business Of course another important difference is that as the owner of an RIA you are building value in your frm in a way that employees at a wirehouse are not Not only are the economics on an annual basis to be considered but also the equity value yoursquove built in your frm

Drawing on the responses of hundreds of Independent and Hybrid RIA frms we are using the results of the 2016 Investment News Financial Performance Study of Advisory Firms to highlight the typical fnancial performance of three different sizes of RIA frmsmdashensemble enterprise ensemble and super ensemble frms While wersquove reported the average economics of each frm category itrsquos important to note that many frms achieve superior fnancial performance At a wirehouse the economics are prescribed whereas those of an RIA frm will differ depending on the client base services offered and diligence of owners in refning the business model growing the frm and managing expenses

Alongside the RIA frm economics from the study results of a hypothetical wirehouse team are also presented Each wirehouse has its own payouts and policies but this hypothetical result is presented as a typical comparison Finally a 10-year estimate of potential frm values is presented based on DeVoe amp Company estimates for frms in a reasonable range of growth rates and anticipated valuation levels based on frm size

From an examination of the results in the table (following page) there are a few key factors to highlight

bull The primary expense for a wirehouse broker is the share taken by the frm

bull RIA frms typically pay their owners a salary included on the line Professional Compensation ndash Owners and also proft sharing

bull A good comparison between the two models is Earnings Before Owner Compensation (EBOC) which combines salary bonus and proft sharing Whether viewed as an absolute fgure or percentage of revenue the RIA frms in the study generate a greater income for owners than the wirehouse estimates

bull While EBOC bases the comparison at the frm or team level Pre-Tax Income Per Owner is the comparison at the individual-owner level Each frm group contains a majority of frms with multiple owners and the RIA fgure shown is the average from the study

bull Assuming a reasonable range of growth and valuations the potential frm value is shown for the RIA frm whereas the value of the wirehouse practice is less certain



Ensemble Enterprise Ensemble Super Ensemble (lt$5M Annual Revenue) ($5-10M Annual Revenue) ($10M+ Annual Revenue)

RIA Wirehouse RIA Wirehouse RIA Wirehouse

Average Annual Gross Revenue $1752600 $1752600 $7316500 $7316500 $19262600 $19262600

Percentage Paid Out to Advisor 100 40 100 40 100 40

Advisor Average Net Revenue $1752600 $701000 $7316500 $2926600 $19262600 $7705000

Direct Expenses Professional Compensation ndash Owners

Professional Compensation ndash Non-Owners External Referral Fees

$419400 $231300

$13500

NA NA NA

$1254400 $1232000

$195400

NA NA NA

$3240300 $4013200

$275800

NA NA NA

Gross Proft $1088400 $701000 $4634700 $2926600 $11733200 $7705000

Overhead Expenses Non-Professional Compensation

Payroll Taxes Benefts Staff-Related Other Overhead Expense

$214000 $131400 $355300

NA NA

$52600

$898300 $475600

$1375000

NA NA

$219500

$2461600 $1236900 $3186100

NA NA

$231200

Operating Proft $387700 $648500 $1885800 $2707100 $4848700 $7473900

Earnings Before Owner Compensation (EBOC) $807100 (461)

$648500 (370)

$3140200 (429)

$2707100 (370)

$8089000 (421)

$7473900 (388)

Pre-Tax Income per Owner $462500 $371200 $946600 $816800 $1080100 $995400

Potential Firm Value in 10 Years ($M) $5-10 Uncertain $25-45 Uncertain $65-120 Uncertain

Source 2016 InvestmentNews Financial Performance Study Pershing Advisor Solutions DeVoe amp Company Note Potential frm values in 10 years represent a range of outcomes given reasonable assumptions of growth and valuation

Whether as an individual or as a team the economics of starting or joining an RIA frm can be attractive In addition to the examples shown above Pershing Advisor Solutions has a number of tools and resources to help with the fnancial decision-making processmdashand with the ongoing management of your independent frm Two examples include

Business Assessmentmdashtailored specifcally for Independent RIAsmdashtakes a holistic view of a frm to gauge performance in six key strategic and operational areas

bull Strategic PlanningmdashEvaluate the state of your frmrsquos strategic planning efforts across several dimensions and determine how to prioritize efforts

bull Value PropositionmdashDetermine where you are in developing and articulating a value proposition for your frm and gain insights on how to differentiate

bull MarketingmdashAssess your frmrsquos current marketing efforts and discover opportunities for improvement bull Client-Level ProftabilitymdashAnalyze the critical components to help your frm achieve long-term proftable results bull GrowthmdashEvaluate your frmrsquos ability to achieve long-term consistent growth and uncover actions that can help foster it bull Referral CulturemdashPinpoint your frmrsquos referral-related capabilities and competencies

Business Metrics Toolmdashalso tailored specifcally for independent RIAsmdashenables your frm to

bull Track important key performance indicators and key ratios to assess your frmrsquos trends over the past fve years bull Benchmark your frm against where it is today versus plan or where it is today versus year-over-year trends bull Compare your frm against various industry benchmarks (by affliation model revenue business model practice structure)

and analyze what the numbers mean to your frm bull Design customized dashboard and management reports to help your frm gauge trends and measure progress

Please consult with a Pershing Advisor Solutions Business Development Offcer or Relationship Manager to learn more

14


Today there are more options and resources available to any advisor or team making the transition to the RIA business model than ever before An entire ecosystem of support services has emerged matured and evolved during the last two decades These support services include everything from front-offce to back-offce to off-the-shelf or fully customized in order to facilitate the formation of an RIA frm Furthermore a range of frms now exist that thrive off the growth of new advisors and teams joining their ranks Whatever your preferencemdashranging from complete independence in founding your own frm and making every decision to joining an existing frm with an infrastructure team and culture already in place or even founding a frm with the assistance from a platform provideraggregatormdashthere are a range of potential solutions that provide varying degrees of support

Some key dimensions to consider are

bull Scale of Existing PracticemdashThere are certain fxed costs that favor the economics at larger frms For an individual with a small- to medium-size practice relying on an existing platform or joining an existing frm could present favorable economics

bull Client NeedsmdashWhat do your clients need Does it exist within an existing organization or do you need to create it If you have a very specifc vision of how you want to serve clients and the niche you serve has very specifc needs you may want to consider starting your own frm Similarly the more complex technology and operations platforms are the more they can be customized to individual frm preferences and needs

bull Commissioned AssetsmdashIf you have a strong reliance on revenue from commissions and plan to maintain business in that revenue model regardless of where you land on the independence spectrum you will need access to a broker-dealer That may mean founding a Hybrid RIA frm or partnering with a platform or existing enterprise that has broker-dealer access

bull Personal Drive and Risk TolerancemdashDepending on personal preferences and priorities the idea of starting a completely new business enterprise will appeal to some more so than others As with anything new there will be a learning curve risks involved and a considerable time commitment Leveraging an established platform or joining an existing frm reduces the effort and risk considerably which should be weighed against other factors important to you

bull Technology and SupportmdashTechnology is a critical part of your business and itrsquos evolving at an accelerated pace across the industry Is technology one of your strengths Does your vision depend on solving complex needs using technology Technology and operations become exponentially more complex as they are customized to individual frm preferences and needs

bull Degree of Autonomy PreferredmdashIt almost goes without saying that founding a new frm completely from scratch presents a greater degree of autonomy than relying on an existing platform or joining an existing frm For some this aspect may be a more important distinction than for others

bull Access to Capital or Need for PayoutmdashStarting a new frm takes a certain amount of investment and working capital to get going Itrsquos quite the opposite of receiving a payment in advance for your business Some models provide for capital infusion or an opportunity to extract value from your business up front Of course any upfront payment or loan comes with a cost which needs to be weighed against the benefts Any party offering an infusion of cash up front is expecting to share in the cash fow equity ownership or both

The table on the next page presents a range of business models and options available There is no right or wrong approach rather itrsquos a matter of individual circumstances and preferences that should guide you toward your destination



More Independent Less Independent

Start an Start an Independent Join a Strategic Join an Existing Join an IBD with Independent RIA RIA with a Partner Acquiring Firm Independent RIA a Corporate RIA

Overview Advisor founds a Advisor becomes Advisor founds a new Advisor opens a new Advisor becomes new frm from partner or employee frm with a partner to offce of an established employee or contractor scratch of an existing RIA provide fnancing a of an Independent frm

platform or both Broker-Dealer

Best Fit for Have an Have strong shared Like the idea of an Have strong shared Have solo practice Advisors Whohellip entrepreneurial values client ft and Independent RIA values client ft and

Prefer prescribed mindset mutual interest with mutual interest with a Lack initial capital to solutionsa local RIA frm strategic acquiring frm

Have the vision and establish a frm or Like being associated drive to build a frm Prefer an established desire an upfront payout Drive to establish an with a provider brand from scratch frm presence Independent offce

May want to leverage business model Prefer signifcant existing infrastructure Prefer an established and support commissionedpartners business model and businesssupport

Up to a full 100 Income Full 100 revenue Based on frm Up to a full 100 Percentage of revenue generated generated compensation revenue generated revenue less fee for services structure less fee for services from frm

Commissioned As an Independent

from partner

Depends on partner As an Independent RIA Depends on partner Natural ft with Assets RIA may affliate may affliate with an commissioned

with an IBD for IBD for commissioned business commissioned business business

Clients Complete fexibility Complete fexibility for Important to choose an Important to choose Best ft for advisor your current client and existing RIA with similar for your current an existing RIA with with signifcant intended target client client profle and service client and intended similar client profle commissioned

philosophy target client and service philosophy business

Products Complete freedom Relationships with May be fexible but May be fexible but Limited range of third-party platform will have established to choose products an established RIA will house products providers providers meeting client needs have some providers

Platform and Complete freedom to Relationships with May be fexible but Established RIA frm Technology third-party platform will have established Technology choose technology will have a solution platform provided providers providers from Custodian or

third-party

Compliance Responsibility of RIA Relationships with Typically provided by Established RIA frm Compliance and third-party platform strategic acquirer will have a solution and Oversight oversight provided providers

Opportunity to Complete ownership Complete ownership Typically receive cash Oftentimes become Own the client of frm less debt andor earn stock in an equity owner in practice At larger Build Value of frm commitment the parent company the RIA frm scale value creation

in exchange for cash is less due to a fxed fow commitment cost structure

Examples Dynasty Live Oak Bank HighTower Focus Large range of Large range of (Financing only) Financial Independent RIAsPartners Independent Broker-

in the marketplace Dealers in marketplace

Source DeVoe amp Company Pershing Advisor Solutions

16


ldquoI just canrsquot stress enough that the reason we were able to move 90 percent of our assets in 90 days was because we spent a year getting ready for that dayrdquo ndash Andrew Mies 6 Meridian

ldquoThe frst key wisdom particularly if your transition will involve multiple partnersmdashif therersquos going to be a group like we were there were three of usmdashis to really do the work up front on determining your frmrsquos strategy and direction We developed a fve-year business plan If you went back and read it you will fnd that we actually executed most of it shockingly We spend a lot of time as partners talking about frm strategy and directionrdquo

ndash Darren Reinig Delphi Private Advisors

Strategy and Planning

Entrepreneurs are often action oriented but the frst step to making this transition is having a solid business plan in place The key purpose of the business plan is to lay out the strategic vision of what you hope to accomplish and how you will get there There are two key reasons why a plan is important First because when the day of your resignation comes you already need to have a frm infrastructure in place to serve your clients If you are joining an existing frm preparing for that day will be easier but for setting up a new frm the preparations can take a year or more Secondly the growth and long-term success of your new enterprise will rely on a savvy business plan and market strategy that will help you compete and win in the marketplace Making this transition is not easy and it does take workmdashbut the success rate is very very high Custodians such as Pershing Advisor Solutions can help

A complete business plan should include

bull Strategy for market differentiation and branding bull Desired client experience bull Financial forecast and budget bull Functional area plans including operations technology investment solutions marketing and talent management bull Approach to addressing all legal and regulatory requirements

If you are planning to join an established frm then you will need to consider if the ft of that frmrsquos approach to doing business aligns with your approach While more defned in scope no level of personal chemistry and values can substitute for a deep understanding of the frmrsquos business model and practices

Other resources such as those offered by Rockefeller Habits (see pages 19-20 for a sample strategy planning worksheet) can also help kick start the business planning process Successful frms use their strategy to align with their business plan effectively manage resources and drive capital to the right potential growth areas of the frm A strategic plan can guide an independent frm through the various evolutions of its business

Once you have your business plan together and you are serious about the direction you want to take itrsquos appropriate to map out your transition timeline The timeline will help you form a realistic assessment of the tasks to undertake and craft an appropriate work plan that addresses each of the steps you will take When establishing a new frm there is signifcant work to do before opening your doors



Time up to Transition Activities

10-12 Months

8-10 Months

6-8 Months

4-6 Months

3 Months

1-4 Months

Transition Day

1-2 Months Post-opening

bull Conduct due diligence of various affliation choices bull Confrm or reconfrm business plan bull Commit to a decision concerning transition

bull Select and consult with counsel to devise a legal exit strategy bull Identify and review restrictive covenant privacy laws and fnancial obligations that may have an impact

on the transition bull Develop detailed timeline and implementation checklist bull Commit to a custodial relationship bull Enlist custodian to assist in the transition process bull Assign who will be responsible for which aspects of the actual transition eg contacting clients

reviewing paperwork and transferring accounts

bull Outline ownership and organizational structure of the frm including defned roles for each staff member compensation and benefts packages and payroll process

bull File ADV form

bull Begin searching for potential offce locations bull Begin recruiting for any additions to your frm bull Structure your technology processesmdashclient relationship management system internal accounting and

billing etc and evaluate vendors bull Establish internal compliance procedures bull Select required insurance programs bull Refne your technology processes and select systems bull Design and build frm website

bull Choose offce location bull Acquire offce equipment

bull Produce marketing material such as business cards bull Review client relationships identify and address potential account issues for transitioning to new platform bull Receive training from custodian on account transfers and new account openings bull Conduct due diligence on the fnancial products and services available on your custodian platform

that are necessary to serve your clients and add where necessary bull Develop client and employee communications

bull Submit resignation bull Launch your frmrsquos website bull Contact clients

bull Transition and train staff bull Track and reconcile documents sent to and received by clients bull Monitor and troubleshoot account transfers (escalated by custodian) bull Set up fnancial management systems such as the annual budget and key performance ratios and track

frm revenue and growth bull Ensure smooth fow of operations and other back-offce functions bull Establish relationships with centers of infuence bull Promote the frm

Source An Advisorrsquos Guide to Establishing an Independent Practice Pershing Advisor Solutions

18


Name of Firm Date Team Members Participating

Core ValuesBeliefs (ShouldShould Not)

Purpose (Why)

Targets (3-5 Years) (Where)

Goals (1Year) (What)

1

2

3

4

5

Core Competencies

1

2

3

4

5

Actions (To Live Values Purpose BHAG)

1

2

3

4

5

Future Date

Revenue

Annual Proft

AUM

Sandbox

Key ThrustsCapabilities (3-5 Year Priorities)

1

2

3

4

5

Big Hairy Audacious Goal (BHAG)

Key Performance Indicators (KPIs) amp Smart Numbers

Brand Promise Critical Numbers (1 or 2)

Year Ending

Revenues

Proft

AUM

Gross Margin

Clients per

Professional

AUM per

Professional

Revenue per

Professional

Revenue per Client

Key Initiatives (Annual Priorities)

1

2

3

4

5

1

2

Strengths Weaknesses

1

2

3

4

5

6

7

8

9

10

1 6

2 7

3 8

4 9

5 10

Copyright 2005 Gazelles Publishing Inc


Opportunities to Exceed Plan Threats to Making Plan

1 6 1

2 7 2

3 8 3

4 9 4

5 10 5

Actions (Quarter) How

Theme (Annual) Your Accountability (WhoWhen)

Quarter 1

Revenue

Proft

AUM

New Clients

NNA

Qualifed Referrals

AUM per Professional

Revenue per Professional

Revenue per Client

Deadline

Measurable Target (Critical Number)

Theme Name

Scoreboard Design (Describe andor sketch your

design in this space)

Your KPIs Goals

1

2

3

Your Quarterly Priorities Due

1

2

3

4

5

Rocks (Quarterly Priorities)

CelebrationReward

1

2

3

4

5


20


With a strategy and timeline in place you can now consider the transition plan to establish your business while meeting all the legal compliance and regulatory requirements There are legal frms that specialize in these topics and if you donrsquot have such a relationship already Pershing Advisor Solutions can highlight key topics and point you in the direction of an appropriate partner The key areas of risk are legal and compliance and a frm knowledge of the regulations combined with appropriate insurance can help reduce the risks to your new enterprise

The frst step to take will be establishing a legal entity in your state There are a range of considerations not least of which are the tax implications legal-liability exposure and whether you plan to operate your business as the sole owner or with other business owners Possible options include partnership Limited Liability Company (LLC) S Corp C Corp or sole proprietorship (LLCs are usually most common) Each of these carries specifc benefts and limitations both at the outset and in the future

In addition to establishing a legal entity you will need to have the appropriate licenses and registration As the earlier section of this paper Regulatory Environment described you will need to be registered at the state level or federal level with the SEC depending on the size of your business If you will operate under a broker-dealer for commissioned business there are additional requirements Your legal counsel or relationships with a custodian or broker-dealer can provide you with details about the specifc circumstances surrounding your frm

For advisors making the transition from a wirehouse your exit strategy from your employer is a critical key risk factor to mitigate The industry has a specifc standard called The Protocol which was initially established to facilitate movement between frms but may have inadvertently fueled the growth of RIAs This agreement amongst frms allows brokers to take certain specifc pieces of information with them including name and contact information of clients Most frmsmdash but not allmdashfollow The Protocol Any information taken beyond the allowed items can open advisors to legal liability and potentially threaten their ability to get established at a new frm or create their own frm Because the range of contracts signed at an existing frm can be complex it is always sound advice to enlist professional legal counsel in navigating your departure What is heartening to understand is that when done correctly brokers in this situation can generally make a legal departure while bringing client relationships with them to another frm

Once you have a legal entity established and have navigated your transition there are a range of insurance products that can help mitigate risks of your new business Not every frm will choose to purchase all of these products but depending on business model and owner risk tolerance all of these are important to evaluate against your specifc circumstances

bull Errors and Omissions InsurancemdashAlso known as EampO insurance this professional liability insurance is considered essential for an RIA professional to protect the assets of the frm and ownerrsquos personal assets against legal liability resulting from the servicing of clients

bull Commercial Property and Liability InsurancemdashAlso known as PampC coverage this range of insurance policies cover against risks such as fre theft and weather damage

bull Fidelity BondmdashProtects against fraudulent activity by a frmrsquos employees

bull Employment Practices LiabilitymdashProtects the frm and its owners against charges by employees on practices ranging from hiring wrongful termination and workplace liabilities

bull Directors and Offcers Liability InsurancemdashProtects the frmrsquos offcers and directors from any breach of fduciary duty toward clients



Oftentimes the single greatest area of advisor concern is communicating the business change to clients This step almost always goes more smoothly than feared but it is critical to have a plan in place so the elements that are under your control are managed and implemented seamlessly There are a host of communications tools at your disposal and using them in combination is your best solution for informing your clients and maintaining their confdence

Because your top 5-10 of client relationships will make or break the success of this transition it is critical to have a plan that specifcally addresses these relationships For the most important clients a direct call or face-to-face meeting is the usual way to make the initial notifcation of the change at hand This way you can show them how committed you are to their needs address concerns in real time and understand needs and adapt your message to individual situations Some advisors will be able to contact all or nearly all clients personally but for larger frms with many relationships that may not be possible

A written communication is another essential tool used independently or in combination with direct one-on-one outreach An example of an actual letter used by one of the frms we spoke with Archford Capital Strategies is

Sample Announcement Letter from Archford Capital Strategies

Dear Valued Client

Over the years we have taken several evolutionary steps to better serve our clients and today we have taken another such step

We are proud to announce The Maher Group has established our own independent wealth management firm Archford Capital Strategies

There are many considerations that led to this decision but as with everything we do our primary motivator is doing what is in your best interest Going forward independence makes that possible Our goal remains to help simplify and clarify your financial life

At Archford our new name connotes a pride of place a commitment to solid values that underscore our Midwestern heritage It also reflects our mission to use our experience in a way that spans across all your needs As our client you already understand that building trust and relationships has always been a priority for us While many years at the same investment firm has provided great industry experience wersquore ready to work with you according to our own principles with a level of fiduciary care focused solely on your objectives and comprehensive needs

The establishment of Archford Capital Strategies provides us ndash and you ndash with access to the best-in-class services available through a long list of preeminent providers We believe that you will benefit from this change both in the short- and long-term You will be hearing more about our expanded capabilities in the weeks and months ahead as we begin to incorporate the many resources now open to us

In this Welcome Kit we have included all the documents and forms you will need to maintain your relationship with us We will be reaching out to you in the coming days Meanwhile if you have any questions or would like to know more please visit our website wwwarchfordcapitalcom or contact us at your earliest convenience

We have always strived to offer our advice with one purpose To recommend to you what we would do for ourselves and our families We hope you will join us

As always thank you for putting your continued trust in our entire team to help manage your financial life

James D Maher Chief Executive Officer and Founder Archford Capital Strategies

included here Firms may choose to use a single letter or customize multiple letters according to the communication plans for a given segment or individual client situations and needs

Other strategies and tools for client outreach may include

bull Short video message telling your story bull Speaking points for phone and face-to-face conversations bull Frequently Asked Questions for internal education or client access bull Website introducing your frm

Whatever the communications approach you decide to use you will want to consider your message carefully to explain and reassure clients You have the opportunity to control the message and present the situation in exactly the frame and tone you desire A set of key messages that are often used include

bull Motivations behind the move bull Gratitude for frm and personal relationships with clients bull Client focus and service at the core of what the frm does bull Benefts of the change for clients bull Assurances of continued support bull Context of the new frmmdashwhether founding a new frm or transitioning to an established frm

22


ldquoWe looked at the three or four large custodiansmdashthe names you knowmdashall very solid in their capability certainly and they all have strengths and weaknesses We felt like Pershing Advisor Solutions was the best ft for us because of the culture which is outstanding The commitment to us and to our team is just phenomenal They think like we think They put the client frstrdquo ndash Margaret Dechant 6 Meridian

ldquoItrsquos so helpful for people to get some support when you set up a frm because you donrsquot know what you donrsquot know and there are a lot of resources that you could turn to A lot of times these arenrsquot big challenges but they seem to be big challenges at the time In hindsight these challenges were very easy to work through with a little bit of expertise or a little bit of guidance at the right timerdquo ndash Keith McKenzie Delphi Private Advisors

In addition to fnancial products most custodians offer a host of business support services and solutions to help you serve your clients and support the growth of your frm Pershing Advisor Solutions facilitates the transitions of advisors who serve clients with complex fnancial lives and who want to provide them an excellent level of service and freedom of products It is a purely business-to-business provider of RIA solutions for globally-minded multi-million dollar+ frmsmdash including wealth management frms digital providers and institutions

The approach Pershing provides for any assistance with transition includes

bull Experienced managers ensure effcient transition through ldquohands-onrdquo training in technology integration with Pershing and other third-party solutions

bull Multi-disciplinary dedicated team focuses on all aspects of implementation

bull A customized plan provides comprehensive support for unique transitions and businesses

bull Collaboration includes onsite training and client communication support

Sample Transition TeamClient Service Team From Pershing

Prior to Selecting Transition Ongoing Pershing Advisor Solutions Period Support

Business Development Team

Business Development Offcer (primary contact)

Key Subject Matter Experts (informational resources)

EXECUTIVE MANAGEMENT ACCESS

Transition Team

Relationship Manager (primary contact)

Transition Project Manager

Transition Specialist

Key Subject Matter Experts (OperationsServiceTechnology)

Client Service Team


Account Manager

Client Service Liaison


Private Banking Contact (if applicable)



RIA Setup amp Preparation (2-4 Weeks) Account Opening amp Transfer (6-10 Weeks)

Continuous

Pershing on site

Wk 1 Wk 2 Wk 3 Wk 4 Wk 1 Wk 2 Wk 3 Wk 4 Wk 5 Wk 6 Wk 7 Wk 8 Wk 9 Wk 10

bull Asset verification bull NetX360 training

bull Preparation of account applications bull Documentation review Finalize strategy for account preparation

Welcome call ndash bull Completed application reviewfax or image to Client and bull Operationssetup Pershing reconciliation Pershing teams Assign rolesresponsibilities for account opening and customer

and transfer NetX360 access service ndash bull Convert account transition to

bull Creation and preparation of new account booklets CONVERSION assigned bull Client follow up and ongoing NetX360 training service team bull Mail account packages

Note Sample Scenario TasksTimeframe depend on advisor need

Pershing Advisor Solutions customizes the transition process which is driven by the advisorrsquos needs and timeline The primary goals throughout the process are to cause minimal disruption to the advisorrsquos business gain effciencies through collaboration andmdashultimatelymdashimprove the end-client experience

24

Is It Right for You After seeing the benefts and considering the opportunity many fnancial advisors see a clear path for themselves and their clients Sure it may not be easy at frst but so many others have succeeded and realized the benefts For others the decision may not be so obvious The path isnrsquot right for everyonemdashyou may prefer being an employee or are satisfed with your current arrangement or fnd that any level of risk isnrsquot acceptable Everyone will weigh these factors based on their own preferences and some will choose to act

There is no question that founders of RIAs are entrepreneurs who need a certain drive commitment and creativity to build a new frm Still others are able to capitalize on this opportunity by joining an RIA frm that has already seen success and comes with many of the RIA benefts frmly in place These are two different paths and each will be right for some advisors who are considering the RIA business model

Whatever the path to RIA those who have made the transition have told us time and time againldquoWhy didnrsquot I do this soonerrdquo As with forming any major change there is a tendency to continue the status quo because it seems easier and may pose less risk and generally has its pros and cons that can be rationalized Many like Jim Maher at Archford Capital Strategies will declare ldquoThis has unquestionably been a better place for usrdquo

Our hope is that this whitepaper has been an effective way to share the diverse range of considerations in making the decision and the clear steps required to affect the change Three RIA Success Stories on the following pages show how three distinctly different teams came to similar conclusions about their path for the future If you want to learn more or are ready to take the next step we encourage you to reach out to your Pershing Advisor Solutions Business Development Offcer or Relationship Manager Our goal is to bring the Destination RIA a little closer and for those who choose this path facilitate a successful transition


Three RIA Success Stories ARCHFORD CAPITAL STRATEGIES St Louis MO Jim Maher Founder and CEO

The Firm

bull Founded in 2013 by a break-away Merrill Lynch team

bull Core clients are owners of businesses with $5Mndash$250M revenue

bull Firm has grown from $400M to over $600M with a team of 8 growing to 17 people

bull Ranked 19 in the 2016 ldquoTop 50 Fastest Growing Firmsrdquo ranking Financial Advisor Magazine

Key Motivations for Founding an RIA

bull Act as a ldquosolution buyerrdquo on behalf of clients rather than as a ldquoproduct sellerrdquo

bull Ability to create fexible solutions for business owners

bull Access best-of-breed products in particular lending

bull Freedom from institutional constraints

ldquoI never in a million years would have been able to implement [some of our ideas] when I was at a wirehouse or at a hybrid or anywhere and itrsquos that simple Itrsquos about lsquoWe have good ideasrsquo We want to be able to implement those ideas and not have the distractions of whatrsquos right for people in managementrdquo

Why Pershing Advisor Solutions

bull Outstanding lending product solution set

bull World-class experience and transition support

bull Resources like research studies and compensation benchmarks

bull Pershing and Dynasty together were the ideal solution

ldquoA custodian like Pershing is defnitely at a competitive advantage in the marketplace I think the actual custodian transition teams are a critical piece Your current staff theyrsquore not going to be familiar with the technology theyrsquore not going to be familiar with the paperwork [Itrsquos critical to have] the right teams in place boots on the ground when that happens and an ability to communicate directly with a dedicated team thatrsquos going to be helping yourdquo

What the Future Holds

bull Grow to $1B in the next three years

bull Maintain an environment where employees see future opportunities and growth

bull Dream of an all-employee-owned frm

bull Stay involved at least another 20 years

ldquoThis is my dream job What we do today for the people in our organization theyrsquove got a much better clearer trajectory in their growth than what was going on before Our people processes and our culture have never been betterrdquo

Best Practices and Key Learnings

bull Understand differences in ldquoIndependentrdquo business models

bull Have confdence in your custodian transition team

bull Carefully plan your strategy for client communications

bull Level of freedom in RIA model has paid off in unexpected ways

ldquoOur customers itrsquos like theyrsquore proud that theyrsquove invested in this They see that wersquore going back and doing community service Itrsquos like theyrsquore excited for us they see the growth I was in The Wall Street Journal three times this year Never happened at the wirehouses so those are the types of things they want to be a part of The clients want to see that success They like this homegrown company conceptrdquo

26

6 MERIDIAN Wichita KS Margaret Dechant Founder and CEO Andrew Mies Founder and CIO

The Firm

bull Team of 16 with over $2B in client assets broke away from Morgan Stanley in September 2016

bull Nearly 90 client AUM came over initially and another 4-5 anticipated

bull Within six months 95 of client AUM moved over

bull Currently manages more AUM than when they left Morgan Stanley

bull Core clients are high-net-worth individuals and families often with signifcant private banking needs


bull Become business owners to capture the value created

bull Freedom from wirehouse policies on how to do business

bull Flexibility in investment management pooled investments SMAs

bull Enabled to effectively act on teamsrsquo own research

bull Design a more meaningful client experience

ldquoMorgan Stanleyrsquos a great frm And they have a lot of good things about them But as we were looking to broaden out what we could do on the investment management side in particular there were very clear boxes you had to stay within We had just gotten to a point where our research was leading us towards needing to have additional fexibility in order to manage money And Morgan Stanley wasnrsquot going to allow us to do thatrdquo ndash Andrew Mies


bull Strong credit partner and private banking expertise

bull Incredible commitment puts the client frst

bull Dedicated transition teams

ldquoFor several months prior to launch Pershing kept us on track They had a timeline they had all these checkpoints that got us to launch When we left touch-base calls they were fully accountable for the takeaways and they were very accessible to us for random questions as we were learning a lot along the wayrdquo ndash Margaret Dechant


bull Evolve and perfect the client experience

bull Already fve months ahead of schedule on revenue plan

bull Expect to outperform their budget for 2017 and 2018

ldquoThe foundation of our thinking started with a few simple questions lsquoWhat are we going to do and how are we going to make the 6 Meridian experience for our clients feel different than what they experienced at Morgan Stanley How are we going to enhance the experience and make it bigger better and faster stronger Thatrsquos been exciting to think aboutmdashand to see our vision come to liferdquo ndash Margaret Dechant


bull High degree of planning will be rewarded

bull Communicate communicate communicate FAQs for clients key speaking points for staff

bull Involve staff completely including transparency and incentives

ldquoMoving 90 percent of our assets within 90 days was only possible due to the outstanding work of our staff The Partners put in place an aggressive incentive plan for the staff that was tied to several milestones that we wanted to hit We anticipated paying these bonuses out over 9 months based on our targets and our models The staff earned all of the bonuses within 120 days of our launchrdquo ndash Andrew Mies


DELPHI PRIVATE ADVISORS San Diego CA Darren Reinig Founding Partner and CIO Keith McKenzie Founding Partner

The Firm

bull Team of money managers created an RIA greenfeld in 2009

bull Vision to bring a very very high-end investing approach to clients with $2M-$20M in liquid assets

bull Initial assets under $100M has grown to $700M and a team of nine in seven years


bull Realize their own vision for an investment management frm

bull Avoid conficts of a wirehouse

bull Be unconstrained by the business model of an existing frm

ldquoWe launched in November of rsquo09 In all the chaos coming out of that fnancial crisis we really believed the time was right to develop a frm that invested money and served clients the way we would want to be served if we were the client on the other end deciding how to invest our own money Our vision required us to go and build that companyrdquo ndash Darren Reinig


bull Sophisticated lending solutions at institutional pricing

bull Flexible custody of alternative investments

bull Focus on serving RIAs not retail clients

ldquoPershing has a differentiator versus other custodians in fexibility on custody of alternatives and the ability to transition investments that we couldnrsquot on other platforms So that fexibility is there and I think they score very high marks in that areardquo ndash Darren Reinig


bull Exploring new growth opportunities on the platform they have built

bull Increasing focus on client referrals

bull Continuing to have fun

ldquoThe other intangible to this is how enjoyable itrsquos been doing the type of work we do Itrsquos been really enjoyable Itrsquos been intellectually stimulating wersquove learned a lot Wersquove gotten close to these clients and itrsquos bonded them to our frm in a way not possible if we were trying to do this inside of a large institutionrdquo ndash Darren Reinig


bull Get support and advice you trust

bull Really understand the technology before choosing a platform

bull Having scale in an RIA is very important

bull Team approach and a frm-centric service model

bull Have a vision by which decisions can be evaluated

bull Have a business plan and a strategy in place

ldquoYoursquoll see a lot of RIAs that I think start as just trying to replicate what they did within the wirehouse or the bank and they try to build exactly that kind of experience We started with a philosophy and a vision around how money should be managed and then went out and tried to fnd a way to express that in a frmrdquo ndash Keith McKenzie

28

BNY Mellon

BNY Mellon is a global investments company dedicated to helping its clients manage and service their fnancial assets throughout the investment lifecycle Whether providing fnancial services for institutions corporations or individual investors BNY Mellon delivers informed investment management and investment services in 35 countries and more than 100 markets BNY Mellon can act as a single point of contact for clients looking to create trade hold manage service distribute or restructure investments BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation (NYSE BK)

Pershing Advisor Solutions LLC

Pershing Advisor Solutions is one of the worldrsquos leading providers of execution custody fnancing and business management solutions to help advisors manage their businesses effciently and serve their clients effectively Our clients are professionally managed growth-oriented frms that serve high-net-worth and ultra-high-net-worth clients We have built our registered investment advisor custody business from the ground up organized around the needs of the advisory frms we serve With a focus on delivering a superior client service experience innovative technology and fnancial solutions and a practice management offering geared towards implementation we help investment managers wealth managers and family offces thrive in todayrsquos dynamic environment Pershing Advisor Solutions LLC (member FINRASIPC) is a BNY Mellon company

Important Legal InformationmdashPlease read the disclaimer before proceeding

bull Please read these terms and conditions carefully By continuing any further you agree to be bound by the terms and conditions described below bull This paper has been designed for informational purposes only The services and information referenced are for investment professional use only

and not intended for personal individual use Pershing LLC and its affliates do not intend to provide investment advice through this paper and do not represent that the services discussed are suitable for any particular purpose Pershing and its affliates do not and the information contained herein does not intend to render tax or legal advice

Warranty and Limitation of Liability bull The accuracy completeness and timeliness of the information contained herein cannot be guaranteed Pershing and its affliates do not warranty

guarantee or make any representations or make any implied or express warranty or assume any liability with regard to the use of the information contained herein

bull Pershing and its affliates are not liable for any harm caused by the transmission through accessing the services or information contained herein bull Pershing and its affliates have no duty responsibility or obligation to update or correct any information contained herein

copy2018 Pershing Advisor Solutions LLC Pershing Advisor Solutions LLC member FINRA SIPC is a wholly owned subsidiary of The Bank of New York Mellon Corporation (BNY Mellon) Clearing custody or other brokerage services may be provided by Pershing LLC member FINRA NYSE SIPC Pershing Advisor Solutions relies on its affliate Pershing LLC to provide execution services

Bank custody and private banking solutions provided by BNY Mellon National Association (BNY Mellon NA) member FDIC a wholly owned subsidiary of The Bank of New York Mellon Corporation Advisor Solutions refers to the brokerage custody business of Pershing Advisor Solutions LLC andor the bank custody solutions business of BNY Mellon NA

For professional use only Not intended for use by the general public Pershing LLC Pershing Advisor Solutions LLC and BNY Mellon NA Bank Custody Solutions do not provide investment advice

Trademark(s) belong to their respective owners

pershingcom

One Pershing Plaza Jersey City NJ 07399

PAS_0818_2648_WP_DRIA

WP-PAS-DRIA-6-17

DeVoe amp Company DeVoe amp Company is a leading consulting frm and investment bank focused exclusively on supporting wealth management companies Its seasoned team is one of the largest and most experienced in the industry and includes three former heads of $1B+ RIAs and two McKinsey-trained strategy consultants The frm provides unbiased guidance on a wide range of strategic areas including succession planning human capital valuation and mergers amp acquisitions Leveraging 100+

combined years of experience DeVoe amp Company seeks to help its clients accelerate the achievement of their business goals

1

2

6

6

Contents

Executive Summary

The Evolving RIA Landscape

An Introduction to Independence

The Benefts








A Closer Look











Sample TransitionClient Service Team From Pershing


Is It Right for You

Three RIA Success Stories

Archford Capital Strategies

6 Meridian

Delphi Private Advisors

7

8

9

10

11

12

12

13

13

14

15

16

17

18

19

21

22

23

23

24

25

26

26

27

28
















22700

8200

29000

18000

33100

26500

38000

27000

Total 30900 2005

Total 47000 2010

Total 59600 2015

Total 65000 2020e






2







67

64

63

54

43

39

33


Greater autonomy

Higher payout
















150

120

90

60


37 42

76 7822

49

56 64

2013 2014 2015 2016



4



337

325

253














The Benefts








6

































8



















Growing Wealth

Protecting Wealth

Leveraging Wealth

Transferring Wealth


















$183M $1058M $2077M

Total Revenue $1424000 $7567000 $15374000













































12

A Closer Look




















$419400 $231300

$13500

NA NA NA

$1254400 $1232000

$195400

NA NA NA

$3240300 $4013200

$275800

NA NA NA

Gross Proft $1088400 $701000 $4634700 $2926600 $11733200 $7705000



$214000 $131400 $355300

NA NA

$52600

$898300 $475600

$1375000

NA NA

$219500

$2461600 $1236900 $3186100

NA NA

$231200

Operating Proft $387700 $648500 $1885800 $2707100 $4848700 $7473900


$648500 (370)

$3140200 (429)

$2707100 (370)

$8089000 (421)

$7473900 (388)













14
























from partner







third-party







16















10-12 Months

8-10 Months

6-8 Months

4-6 Months

3 Months

1-4 Months

Transition Day







bull File ADV form










18




Purpose (Why)



1

2

3

4

5

Core Competencies

1

2

3

4

5


1

2

3

4

5

Future Date

Revenue

Annual Proft

AUM

Sandbox


1

2

3

4

5




Year Ending

Revenues

Proft

AUM

Gross Margin

Clients per

Professional

AUM per

Professional

Revenue per

Professional

Revenue per Client


1

2

3

4

5

1

2


1

2

3

4

5

6

7

8

9

10

1 6

2 7

3 8

4 9

5 10




1 6 1

2 7 2

3 8 3

4 9 4

5 10 5



Quarter 1

Revenue

Proft

AUM

New Clients

NNA

Qualifed Referrals



Revenue per Client

Deadline


Theme Name



Your KPIs Goals

1

2

3


1

2

3

4

5


CelebrationReward

1

2

3

4

5


20


















Dear Valued Client















22
















Transition Team





Client Service Team


Account Manager







Continuous

Pershing on site









24







The Firm





























26


The Firm






























The Firm



























28

BNY Mellon














pershingcom



WP-PAS-DRIA-6-17


















22700

8200

29000

18000

33100

26500

38000

27000

Total 30900 2005

Total 47000 2010

Total 59600 2015

Total 65000 2020e






2







67

64

63

54

43

39

33


Greater autonomy

Higher payout
















150

120

90

60


37 42

76 7822

49

56 64

2013 2014 2015 2016



4



337

325

253














The Benefts








6

































8



















Growing Wealth

Protecting Wealth

Leveraging Wealth

Transferring Wealth


















$183M $1058M $2077M

Total Revenue $1424000 $7567000 $15374000













































12

A Closer Look




















$419400 $231300

$13500

NA NA NA

$1254400 $1232000

$195400

NA NA NA

$3240300 $4013200

$275800

NA NA NA

Gross Proft $1088400 $701000 $4634700 $2926600 $11733200 $7705000



$214000 $131400 $355300

NA NA

$52600

$898300 $475600

$1375000

NA NA

$219500

$2461600 $1236900 $3186100

NA NA

$231200

Operating Proft $387700 $648500 $1885800 $2707100 $4848700 $7473900


$648500 (370)

$3140200 (429)

$2707100 (370)

$8089000 (421)

$7473900 (388)













14
























from partner







third-party







16















10-12 Months

8-10 Months

6-8 Months

4-6 Months

3 Months

1-4 Months

Transition Day







bull File ADV form










18




Purpose (Why)



1

2

3

4

5

Core Competencies

1

2

3

4

5


1

2

3

4

5

Future Date

Revenue

Annual Proft

AUM

Sandbox


1

2

3

4

5




Year Ending

Revenues

Proft

AUM

Gross Margin

Clients per

Professional

AUM per

Professional

Revenue per

Professional

Revenue per Client


1

2

3

4

5

1

2


1

2

3

4

5

6

7

8

9

10

1 6

2 7

3 8

4 9

5 10




1 6 1

2 7 2

3 8 3

4 9 4

5 10 5



Quarter 1

Revenue

Proft

AUM

New Clients

NNA

Qualifed Referrals



Revenue per Client

Deadline


Theme Name



Your KPIs Goals

1

2

3


1

2

3

4

5


CelebrationReward

1

2

3

4

5


20


















Dear Valued Client















22
















Transition Team





Client Service Team


Account Manager







Continuous

Pershing on site









24







The Firm





























26


The Firm






























The Firm



























28

BNY Mellon














pershingcom



WP-PAS-DRIA-6-17






22700

8200

29000

18000

33100

26500

38000

27000

Total 30900 2005

Total 47000 2010

Total 59600 2015

Total 65000 2020e






2







67

64

63

54

43

39

33


Greater autonomy

Higher payout
















150

120

90

60


37 42

76 7822

49

56 64

2013 2014 2015 2016



4



337

325

253














The Benefts








6

































8



















Growing Wealth

Protecting Wealth

Leveraging Wealth

Transferring Wealth


















$183M $1058M $2077M

Total Revenue $1424000 $7567000 $15374000













































12

A Closer Look




















$419400 $231300

$13500

NA NA NA

$1254400 $1232000

$195400

NA NA NA

$3240300 $4013200

$275800

NA NA NA

Gross Proft $1088400 $701000 $4634700 $2926600 $11733200 $7705000



$214000 $131400 $355300

NA NA

$52600

$898300 $475600

$1375000

NA NA

$219500

$2461600 $1236900 $3186100

NA NA

$231200

Operating Proft $387700 $648500 $1885800 $2707100 $4848700 $7473900


$648500 (370)

$3140200 (429)

$2707100 (370)

$8089000 (421)

$7473900 (388)













14
























from partner







third-party







16















10-12 Months

8-10 Months

6-8 Months

4-6 Months

3 Months

1-4 Months

Transition Day







bull File ADV form










18




Purpose (Why)



1

2

3

4

5

Core Competencies

1

2

3

4

5


1

2

3

4

5

Future Date

Revenue

Annual Proft

AUM

Sandbox


1

2

3

4

5




Year Ending

Revenues

Proft

AUM

Gross Margin

Clients per

Professional

AUM per

Professional

Revenue per

Professional

Revenue per Client


1

2

3

4

5

1

2


1

2

3

4

5

6

7

8

9

10

1 6

2 7

3 8

4 9

5 10




1 6 1

2 7 2

3 8 3

4 9 4

5 10 5



Quarter 1

Revenue

Proft

AUM

New Clients

NNA

Qualifed Referrals



Revenue per Client

Deadline


Theme Name



Your KPIs Goals

1

2

3


1

2

3

4

5


CelebrationReward

1

2

3

4

5


20


















Dear Valued Client















22
















Transition Team





Client Service Team


Account Manager







Continuous

Pershing on site









24







The Firm





























26


The Firm






























The Firm



























28

BNY Mellon














pershingcom



WP-PAS-DRIA-6-17









67

64

63

54

43

39

33


Greater autonomy

Higher payout
















150

120

90

60


37 42

76 7822

49

56 64

2013 2014 2015 2016



4



337

325

253














The Benefts








6

































8



















Growing Wealth

Protecting Wealth

Leveraging Wealth

Transferring Wealth


















$183M $1058M $2077M

Total Revenue $1424000 $7567000 $15374000













































12

A Closer Look




















$419400 $231300

$13500

NA NA NA

$1254400 $1232000

$195400

NA NA NA

$3240300 $4013200

$275800

NA NA NA

Gross Proft $1088400 $701000 $4634700 $2926600 $11733200 $7705000



$214000 $131400 $355300

NA NA

$52600

$898300 $475600

$1375000

NA NA

$219500

$2461600 $1236900 $3186100

NA NA

$231200

Operating Proft $387700 $648500 $1885800 $2707100 $4848700 $7473900


$648500 (370)

$3140200 (429)

$2707100 (370)

$8089000 (421)

$7473900 (388)













14
























from partner







third-party







16















10-12 Months

8-10 Months

6-8 Months

4-6 Months

3 Months

1-4 Months

Transition Day







bull File ADV form










18




Purpose (Why)



1

2

3

4

5

Core Competencies

1

2

3

4

5


1

2

3

4

5

Future Date

Revenue

Annual Proft

AUM

Sandbox


1

2

3

4

5




Year Ending

Revenues

Proft

AUM

Gross Margin

Clients per

Professional

AUM per

Professional

Revenue per

Professional

Revenue per Client


1

2

3

4

5

1

2


1

2

3

4

5

6

7

8

9

10

1 6

2 7

3 8

4 9

5 10




1 6 1

2 7 2

3 8 3

4 9 4

5 10 5



Quarter 1

Revenue

Proft

AUM

New Clients

NNA

Qualifed Referrals



Revenue per Client

Deadline


Theme Name



Your KPIs Goals

1

2

3


1

2

3

4

5


CelebrationReward

1

2

3

4

5


20


















Dear Valued Client















22
















Transition Team





Client Service Team


Account Manager







Continuous

Pershing on site









24







The Firm





























26


The Firm






























The Firm



























28

BNY Mellon














pershingcom



WP-PAS-DRIA-6-17








150

120

90

60


37 42

76 7822

49

56 64

2013 2014 2015 2016



4



337

325

253














The Benefts








6

































8



















Growing Wealth

Protecting Wealth

Leveraging Wealth

Transferring Wealth


















$183M $1058M $2077M

Total Revenue $1424000 $7567000 $15374000













































12

A Closer Look




















$419400 $231300

$13500

NA NA NA

$1254400 $1232000

$195400

NA NA NA

$3240300 $4013200

$275800

NA NA NA

Gross Proft $1088400 $701000 $4634700 $2926600 $11733200 $7705000



$214000 $131400 $355300

NA NA

$52600

$898300 $475600

$1375000

NA NA

$219500

$2461600 $1236900 $3186100

NA NA

$231200

Operating Proft $387700 $648500 $1885800 $2707100 $4848700 $7473900


$648500 (370)

$3140200 (429)

$2707100 (370)

$8089000 (421)

$7473900 (388)













14
























from partner







third-party







16















10-12 Months

8-10 Months

6-8 Months

4-6 Months

3 Months

1-4 Months

Transition Day







bull File ADV form










18




Purpose (Why)



1

2

3

4

5

Core Competencies

1

2

3

4

5


1

2

3

4

5

Future Date

Revenue

Annual Proft

AUM

Sandbox


1

2

3

4

5




Year Ending

Revenues

Proft

AUM

Gross Margin

Clients per

Professional

AUM per

Professional

Revenue per

Professional

Revenue per Client


1

2

3

4

5

1

2


1

2

3

4

5

6

7

8

9

10

1 6

2 7

3 8

4 9

5 10




1 6 1

2 7 2

3 8 3

4 9 4

5 10 5



Quarter 1

Revenue

Proft

AUM

New Clients

NNA

Qualifed Referrals



Revenue per Client

Deadline


Theme Name



Your KPIs Goals

1

2

3


1

2

3

4

5


CelebrationReward

1

2

3

4

5


20


















Dear Valued Client















22
















Transition Team





Client Service Team


Account Manager







Continuous

Pershing on site









24







The Firm





























26


The Firm






























The Firm



























28

BNY Mellon














pershingcom



WP-PAS-DRIA-6-17





337

325

253














The Benefts








6

































8



















Growing Wealth

Protecting Wealth

Leveraging Wealth

Transferring Wealth


















$183M $1058M $2077M

Total Revenue $1424000 $7567000 $15374000













































12

A Closer Look




















$419400 $231300

$13500

NA NA NA

$1254400 $1232000

$195400

NA NA NA

$3240300 $4013200

$275800

NA NA NA

Gross Proft $1088400 $701000 $4634700 $2926600 $11733200 $7705000



$214000 $131400 $355300

NA NA

$52600

$898300 $475600

$1375000

NA NA

$219500

$2461600 $1236900 $3186100

NA NA

$231200

Operating Proft $387700 $648500 $1885800 $2707100 $4848700 $7473900


$648500 (370)

$3140200 (429)

$2707100 (370)

$8089000 (421)

$7473900 (388)













14
























from partner







third-party







16















10-12 Months

8-10 Months

6-8 Months

4-6 Months

3 Months

1-4 Months

Transition Day







bull File ADV form










18




Purpose (Why)



1

2

3

4

5

Core Competencies

1

2

3

4

5


1

2

3

4

5

Future Date

Revenue

Annual Proft

AUM

Sandbox


1

2

3

4

5




Year Ending

Revenues

Proft

AUM

Gross Margin

Clients per

Professional

AUM per

Professional

Revenue per

Professional

Revenue per Client


1

2

3

4

5

1

2


1

2

3

4

5

6

7

8

9

10

1 6

2 7

3 8

4 9

5 10




1 6 1

2 7 2

3 8 3

4 9 4

5 10 5



Quarter 1

Revenue

Proft

AUM

New Clients

NNA

Qualifed Referrals



Revenue per Client

Deadline


Theme Name



Your KPIs Goals

1

2

3


1

2

3

4

5


CelebrationReward

1

2

3

4

5


20


















Dear Valued Client















22
















Transition Team





Client Service Team


Account Manager







Continuous

Pershing on site









24







The Firm





























26


The Firm






























The Firm



























28

BNY Mellon














pershingcom



WP-PAS-DRIA-6-17




The Benefts








6

































8



















Growing Wealth

Protecting Wealth

Leveraging Wealth

Transferring Wealth


















$183M $1058M $2077M

Total Revenue $1424000 $7567000 $15374000













































12

A Closer Look




















$419400 $231300

$13500

NA NA NA

$1254400 $1232000

$195400

NA NA NA

$3240300 $4013200

$275800

NA NA NA

Gross Proft $1088400 $701000 $4634700 $2926600 $11733200 $7705000



$214000 $131400 $355300

NA NA

$52600

$898300 $475600

$1375000

NA NA

$219500

$2461600 $1236900 $3186100

NA NA

$231200

Operating Proft $387700 $648500 $1885800 $2707100 $4848700 $7473900


$648500 (370)

$3140200 (429)

$2707100 (370)

$8089000 (421)

$7473900 (388)













14
























from partner







third-party







16















10-12 Months

8-10 Months

6-8 Months

4-6 Months

3 Months

1-4 Months

Transition Day







bull File ADV form










18




Purpose (Why)



1

2

3

4

5

Core Competencies

1

2

3

4

5


1

2

3

4

5

Future Date

Revenue

Annual Proft

AUM

Sandbox


1

2

3

4

5




Year Ending

Revenues

Proft

AUM

Gross Margin

Clients per

Professional

AUM per

Professional

Revenue per

Professional

Revenue per Client


1

2

3

4

5

1

2


1

2

3

4

5

6

7

8

9

10

1 6

2 7

3 8

4 9

5 10




1 6 1

2 7 2

3 8 3

4 9 4

5 10 5



Quarter 1

Revenue

Proft

AUM

New Clients

NNA

Qualifed Referrals



Revenue per Client

Deadline


Theme Name



Your KPIs Goals

1

2

3


1

2

3

4

5


CelebrationReward

1

2

3

4

5


20


















Dear Valued Client















22
















Transition Team





Client Service Team


Account Manager







Continuous

Pershing on site









24







The Firm





























26


The Firm






























The Firm



























28

BNY Mellon














pershingcom



WP-PAS-DRIA-6-17



































8



















Growing Wealth

Protecting Wealth

Leveraging Wealth

Transferring Wealth


















$183M $1058M $2077M

Total Revenue $1424000 $7567000 $15374000













































12

A Closer Look




















$419400 $231300

$13500

NA NA NA

$1254400 $1232000

$195400

NA NA NA

$3240300 $4013200

$275800

NA NA NA

Gross Proft $1088400 $701000 $4634700 $2926600 $11733200 $7705000



$214000 $131400 $355300

NA NA

$52600

$898300 $475600

$1375000

NA NA

$219500

$2461600 $1236900 $3186100

NA NA

$231200

Operating Proft $387700 $648500 $1885800 $2707100 $4848700 $7473900


$648500 (370)

$3140200 (429)

$2707100 (370)

$8089000 (421)

$7473900 (388)













14
























from partner







third-party







16















10-12 Months

8-10 Months

6-8 Months

4-6 Months

3 Months

1-4 Months

Transition Day







bull File ADV form










18




Purpose (Why)



1

2

3

4

5

Core Competencies

1

2

3

4

5


1

2

3

4

5

Future Date

Revenue

Annual Proft

AUM

Sandbox


1

2

3

4

5




Year Ending

Revenues

Proft

AUM

Gross Margin

Clients per

Professional

AUM per

Professional

Revenue per

Professional

Revenue per Client


1

2

3

4

5

1

2


1

2

3

4

5

6

7

8

9

10

1 6

2 7

3 8

4 9

5 10




1 6 1

2 7 2

3 8 3

4 9 4

5 10 5



Quarter 1

Revenue

Proft

AUM

New Clients

NNA

Qualifed Referrals



Revenue per Client

Deadline


Theme Name



Your KPIs Goals

1

2

3


1

2

3

4

5


CelebrationReward

1

2

3

4

5


20


















Dear Valued Client















22
















Transition Team





Client Service Team


Account Manager







Continuous

Pershing on site









24







The Firm





























26


The Firm






























The Firm



























28

BNY Mellon














pershingcom



WP-PAS-DRIA-6-17



























8



















Growing Wealth

Protecting Wealth

Leveraging Wealth

Transferring Wealth


















$183M $1058M $2077M

Total Revenue $1424000 $7567000 $15374000













































12

A Closer Look




















$419400 $231300

$13500

NA NA NA

$1254400 $1232000

$195400

NA NA NA

$3240300 $4013200

$275800

NA NA NA

Gross Proft $1088400 $701000 $4634700 $2926600 $11733200 $7705000



$214000 $131400 $355300

NA NA

$52600

$898300 $475600

$1375000

NA NA

$219500

$2461600 $1236900 $3186100

NA NA

$231200

Operating Proft $387700 $648500 $1885800 $2707100 $4848700 $7473900


$648500 (370)

$3140200 (429)

$2707100 (370)

$8089000 (421)

$7473900 (388)













14
























from partner







third-party







16















10-12 Months

8-10 Months

6-8 Months

4-6 Months

3 Months

1-4 Months

Transition Day







bull File ADV form










18




Purpose (Why)



1

2

3

4

5

Core Competencies

1

2

3

4

5


1

2

3

4

5

Future Date

Revenue

Annual Proft

AUM

Sandbox


1

2

3

4

5




Year Ending

Revenues

Proft

AUM

Gross Margin

Clients per

Professional

AUM per

Professional

Revenue per

Professional

Revenue per Client


1

2

3

4

5

1

2


1

2

3

4

5

6

7

8

9

10

1 6

2 7

3 8

4 9

5 10




1 6 1

2 7 2

3 8 3

4 9 4

5 10 5



Quarter 1

Revenue

Proft

AUM

New Clients

NNA

Qualifed Referrals



Revenue per Client

Deadline


Theme Name



Your KPIs Goals

1

2

3


1

2

3

4

5


CelebrationReward

1

2

3

4

5


20


















Dear Valued Client















22
















Transition Team





Client Service Team


Account Manager







Continuous

Pershing on site









24







The Firm





























26


The Firm






























The Firm



























28

BNY Mellon














pershingcom



WP-PAS-DRIA-6-17





















Growing Wealth

Protecting Wealth

Leveraging Wealth

Transferring Wealth


















$183M $1058M $2077M

Total Revenue $1424000 $7567000 $15374000













































12

A Closer Look




















$419400 $231300

$13500

NA NA NA

$1254400 $1232000

$195400

NA NA NA

$3240300 $4013200

$275800

NA NA NA

Gross Proft $1088400 $701000 $4634700 $2926600 $11733200 $7705000



$214000 $131400 $355300

NA NA

$52600

$898300 $475600

$1375000

NA NA

$219500

$2461600 $1236900 $3186100

NA NA

$231200

Operating Proft $387700 $648500 $1885800 $2707100 $4848700 $7473900


$648500 (370)

$3140200 (429)

$2707100 (370)

$8089000 (421)

$7473900 (388)













14
























from partner







third-party







16















10-12 Months

8-10 Months

6-8 Months

4-6 Months

3 Months

1-4 Months

Transition Day







bull File ADV form










18




Purpose (Why)



1

2

3

4

5

Core Competencies

1

2

3

4

5


1

2

3

4

5

Future Date

Revenue

Annual Proft

AUM

Sandbox


1

2

3

4

5




Year Ending

Revenues

Proft

AUM

Gross Margin

Clients per

Professional

AUM per

Professional

Revenue per

Professional

Revenue per Client


1

2

3

4

5

1

2


1

2

3

4

5

6

7

8

9

10

1 6

2 7

3 8

4 9

5 10




1 6 1

2 7 2

3 8 3

4 9 4

5 10 5



Quarter 1

Revenue

Proft

AUM

New Clients

NNA

Qualifed Referrals



Revenue per Client

Deadline


Theme Name



Your KPIs Goals

1

2

3


1

2

3

4

5


CelebrationReward

1

2

3

4

5


20


















Dear Valued Client















22
















Transition Team





Client Service Team


Account Manager







Continuous

Pershing on site









24







The Firm





























26


The Firm






























The Firm



























28

BNY Mellon














pershingcom



WP-PAS-DRIA-6-17










Growing Wealth

Protecting Wealth

Leveraging Wealth

Transferring Wealth


















$183M $1058M $2077M

Total Revenue $1424000 $7567000 $15374000













































12

A Closer Look




















$419400 $231300

$13500

NA NA NA

$1254400 $1232000

$195400

NA NA NA

$3240300 $4013200

$275800

NA NA NA

Gross Proft $1088400 $701000 $4634700 $2926600 $11733200 $7705000



$214000 $131400 $355300

NA NA

$52600

$898300 $475600

$1375000

NA NA

$219500

$2461600 $1236900 $3186100

NA NA

$231200

Operating Proft $387700 $648500 $1885800 $2707100 $4848700 $7473900


$648500 (370)

$3140200 (429)

$2707100 (370)

$8089000 (421)

$7473900 (388)













14
























from partner







third-party







16















10-12 Months

8-10 Months

6-8 Months

4-6 Months

3 Months

1-4 Months

Transition Day







bull File ADV form










18




Purpose (Why)



1

2

3

4

5

Core Competencies

1

2

3

4

5


1

2

3

4

5

Future Date

Revenue

Annual Proft

AUM

Sandbox


1

2

3

4

5




Year Ending

Revenues

Proft

AUM

Gross Margin

Clients per

Professional

AUM per

Professional

Revenue per

Professional

Revenue per Client


1

2

3

4

5

1

2


1

2

3

4

5

6

7

8

9

10

1 6

2 7

3 8

4 9

5 10




1 6 1

2 7 2

3 8 3

4 9 4

5 10 5



Quarter 1

Revenue

Proft

AUM

New Clients

NNA

Qualifed Referrals



Revenue per Client

Deadline


Theme Name



Your KPIs Goals

1

2

3


1

2

3

4

5


CelebrationReward

1

2

3

4

5


20


















Dear Valued Client















22
















Transition Team





Client Service Team


Account Manager







Continuous

Pershing on site









24







The Firm





























26


The Firm






























The Firm



























28

BNY Mellon














pershingcom



WP-PAS-DRIA-6-17












$183M $1058M $2077M

Total Revenue $1424000 $7567000 $15374000













































12

A Closer Look




















$419400 $231300

$13500

NA NA NA

$1254400 $1232000

$195400

NA NA NA

$3240300 $4013200

$275800

NA NA NA

Gross Proft $1088400 $701000 $4634700 $2926600 $11733200 $7705000



$214000 $131400 $355300

NA NA

$52600

$898300 $475600

$1375000

NA NA

$219500

$2461600 $1236900 $3186100

NA NA

$231200

Operating Proft $387700 $648500 $1885800 $2707100 $4848700 $7473900


$648500 (370)

$3140200 (429)

$2707100 (370)

$8089000 (421)

$7473900 (388)













14
























from partner







third-party







16















10-12 Months

8-10 Months

6-8 Months

4-6 Months

3 Months

1-4 Months

Transition Day







bull File ADV form










18




Purpose (Why)



1

2

3

4

5

Core Competencies

1

2

3

4

5


1

2

3

4

5

Future Date

Revenue

Annual Proft

AUM

Sandbox


1

2

3

4

5




Year Ending

Revenues

Proft

AUM

Gross Margin

Clients per

Professional

AUM per

Professional

Revenue per

Professional

Revenue per Client


1

2

3

4

5

1

2


1

2

3

4

5

6

7

8

9

10

1 6

2 7

3 8

4 9

5 10




1 6 1

2 7 2

3 8 3

4 9 4

5 10 5



Quarter 1

Revenue

Proft

AUM

New Clients

NNA

Qualifed Referrals



Revenue per Client

Deadline


Theme Name



Your KPIs Goals

1

2

3


1

2

3

4

5


CelebrationReward

1

2

3

4

5


20


















Dear Valued Client















22
















Transition Team





Client Service Team


Account Manager







Continuous

Pershing on site









24







The Firm





























26


The Firm






























The Firm



























28

BNY Mellon














pershingcom



WP-PAS-DRIA-6-17
































12

A Closer Look




















$419400 $231300

$13500

NA NA NA

$1254400 $1232000

$195400

NA NA NA

$3240300 $4013200

$275800

NA NA NA

Gross Proft $1088400 $701000 $4634700 $2926600 $11733200 $7705000



$214000 $131400 $355300

NA NA

$52600

$898300 $475600

$1375000

NA NA

$219500

$2461600 $1236900 $3186100

NA NA

$231200

Operating Proft $387700 $648500 $1885800 $2707100 $4848700 $7473900


$648500 (370)

$3140200 (429)

$2707100 (370)

$8089000 (421)

$7473900 (388)













14
























from partner







third-party







16















10-12 Months

8-10 Months

6-8 Months

4-6 Months

3 Months

1-4 Months

Transition Day







bull File ADV form










18




Purpose (Why)



1

2

3

4

5

Core Competencies

1

2

3

4

5


1

2

3

4

5

Future Date

Revenue

Annual Proft

AUM

Sandbox


1

2

3

4

5




Year Ending

Revenues

Proft

AUM

Gross Margin

Clients per

Professional

AUM per

Professional

Revenue per

Professional

Revenue per Client


1

2

3

4

5

1

2


1

2

3

4

5

6

7

8

9

10

1 6

2 7

3 8

4 9

5 10




1 6 1

2 7 2

3 8 3

4 9 4

5 10 5



Quarter 1

Revenue

Proft

AUM

New Clients

NNA

Qualifed Referrals



Revenue per Client

Deadline


Theme Name



Your KPIs Goals

1

2

3


1

2

3

4

5


CelebrationReward

1

2

3

4

5


20


















Dear Valued Client















22
















Transition Team





Client Service Team


Account Manager







Continuous

Pershing on site









24







The Firm





























26


The Firm






























The Firm



























28

BNY Mellon














pershingcom



WP-PAS-DRIA-6-17



A Closer Look




















$419400 $231300

$13500

NA NA NA

$1254400 $1232000

$195400

NA NA NA

$3240300 $4013200

$275800

NA NA NA

Gross Proft $1088400 $701000 $4634700 $2926600 $11733200 $7705000



$214000 $131400 $355300

NA NA

$52600

$898300 $475600

$1375000

NA NA

$219500

$2461600 $1236900 $3186100

NA NA

$231200

Operating Proft $387700 $648500 $1885800 $2707100 $4848700 $7473900


$648500 (370)

$3140200 (429)

$2707100 (370)

$8089000 (421)

$7473900 (388)













14
























from partner







third-party







16















10-12 Months

8-10 Months

6-8 Months

4-6 Months

3 Months

1-4 Months

Transition Day







bull File ADV form










18




Purpose (Why)



1

2

3

4

5

Core Competencies

1

2

3

4

5


1

2

3

4

5

Future Date

Revenue

Annual Proft

AUM

Sandbox


1

2

3

4

5




Year Ending

Revenues

Proft

AUM

Gross Margin

Clients per

Professional

AUM per

Professional

Revenue per

Professional

Revenue per Client


1

2

3

4

5

1

2


1

2

3

4

5

6

7

8

9

10

1 6

2 7

3 8

4 9

5 10




1 6 1

2 7 2

3 8 3

4 9 4

5 10 5



Quarter 1

Revenue

Proft

AUM

New Clients

NNA

Qualifed Referrals



Revenue per Client

Deadline


Theme Name



Your KPIs Goals

1

2

3


1

2

3

4

5


CelebrationReward

1

2

3

4

5


20


















Dear Valued Client















22
















Transition Team





Client Service Team


Account Manager







Continuous

Pershing on site









24







The Firm





























26


The Firm






























The Firm



























28

BNY Mellon














pershingcom



WP-PAS-DRIA-6-17











$419400 $231300

$13500

NA NA NA

$1254400 $1232000

$195400

NA NA NA

$3240300 $4013200

$275800

NA NA NA

Gross Proft $1088400 $701000 $4634700 $2926600 $11733200 $7705000



$214000 $131400 $355300

NA NA

$52600

$898300 $475600

$1375000

NA NA

$219500

$2461600 $1236900 $3186100

NA NA

$231200

Operating Proft $387700 $648500 $1885800 $2707100 $4848700 $7473900


$648500 (370)

$3140200 (429)

$2707100 (370)

$8089000 (421)

$7473900 (388)













14
























from partner







third-party







16















10-12 Months

8-10 Months

6-8 Months

4-6 Months

3 Months

1-4 Months

Transition Day







bull File ADV form










18




Purpose (Why)



1

2

3

4

5

Core Competencies

1

2

3

4

5


1

2

3

4

5

Future Date

Revenue

Annual Proft

AUM

Sandbox


1

2

3

4

5




Year Ending

Revenues

Proft

AUM

Gross Margin

Clients per

Professional

AUM per

Professional

Revenue per

Professional

Revenue per Client


1

2

3

4

5

1

2


1

2

3

4

5

6

7

8

9

10

1 6

2 7

3 8

4 9

5 10




1 6 1

2 7 2

3 8 3

4 9 4

5 10 5



Quarter 1

Revenue

Proft

AUM

New Clients

NNA

Qualifed Referrals



Revenue per Client

Deadline


Theme Name



Your KPIs Goals

1

2

3


1

2

3

4

5


CelebrationReward

1

2

3

4

5


20


















Dear Valued Client















22
















Transition Team





Client Service Team


Account Manager







Continuous

Pershing on site









24







The Firm





























26


The Firm






























The Firm



























28

BNY Mellon














pershingcom



WP-PAS-DRIA-6-17


























from partner







third-party







16















10-12 Months

8-10 Months

6-8 Months

4-6 Months

3 Months

1-4 Months

Transition Day







bull File ADV form










18




Purpose (Why)



1

2

3

4

5

Core Competencies

1

2

3

4

5


1

2

3

4

5

Future Date

Revenue

Annual Proft

AUM

Sandbox


1

2

3

4

5




Year Ending

Revenues

Proft

AUM

Gross Margin

Clients per

Professional

AUM per

Professional

Revenue per

Professional

Revenue per Client


1

2

3

4

5

1

2


1

2

3

4

5

6

7

8

9

10

1 6

2 7

3 8

4 9

5 10




1 6 1

2 7 2

3 8 3

4 9 4

5 10 5



Quarter 1

Revenue

Proft

AUM

New Clients

NNA

Qualifed Referrals



Revenue per Client

Deadline


Theme Name



Your KPIs Goals

1

2

3


1

2

3

4

5


CelebrationReward

1

2

3

4

5


20


















Dear Valued Client















22
















Transition Team





Client Service Team


Account Manager







Continuous

Pershing on site









24







The Firm





























26


The Firm






























The Firm



























28

BNY Mellon














pershingcom



WP-PAS-DRIA-6-17














from partner







third-party







16















10-12 Months

8-10 Months

6-8 Months

4-6 Months

3 Months

1-4 Months

Transition Day







bull File ADV form










18




Purpose (Why)



1

2

3

4

5

Core Competencies

1

2

3

4

5


1

2

3

4

5

Future Date

Revenue

Annual Proft

AUM

Sandbox


1

2

3

4

5




Year Ending

Revenues

Proft

AUM

Gross Margin

Clients per

Professional

AUM per

Professional

Revenue per

Professional

Revenue per Client


1

2

3

4

5

1

2


1

2

3

4

5

6

7

8

9

10

1 6

2 7

3 8

4 9

5 10




1 6 1

2 7 2

3 8 3

4 9 4

5 10 5



Quarter 1

Revenue

Proft

AUM

New Clients

NNA

Qualifed Referrals



Revenue per Client

Deadline


Theme Name



Your KPIs Goals

1

2

3


1

2

3

4

5


CelebrationReward

1

2

3

4

5


20


















Dear Valued Client















22
















Transition Team





Client Service Team


Account Manager







Continuous

Pershing on site









24







The Firm





























26


The Firm






























The Firm



























28

BNY Mellon














pershingcom



WP-PAS-DRIA-6-17

















10-12 Months

8-10 Months

6-8 Months

4-6 Months

3 Months

1-4 Months

Transition Day







bull File ADV form










18




Purpose (Why)



1

2

3

4

5

Core Competencies

1

2

3

4

5


1

2

3

4

5

Future Date

Revenue

Annual Proft

AUM

Sandbox


1

2

3

4

5




Year Ending

Revenues

Proft

AUM

Gross Margin

Clients per

Professional

AUM per

Professional

Revenue per

Professional

Revenue per Client


1

2

3

4

5

1

2


1

2

3

4

5

6

7

8

9

10

1 6

2 7

3 8

4 9

5 10




1 6 1

2 7 2

3 8 3

4 9 4

5 10 5



Quarter 1

Revenue

Proft

AUM

New Clients

NNA

Qualifed Referrals



Revenue per Client

Deadline


Theme Name



Your KPIs Goals

1

2

3


1

2

3

4

5


CelebrationReward

1

2

3

4

5


20


















Dear Valued Client















22
















Transition Team





Client Service Team


Account Manager







Continuous

Pershing on site









24







The Firm





























26


The Firm






























The Firm



























28

BNY Mellon














pershingcom



WP-PAS-DRIA-6-17





10-12 Months

8-10 Months

6-8 Months

4-6 Months

3 Months

1-4 Months

Transition Day







bull File ADV form










18




Purpose (Why)



1

2

3

4

5

Core Competencies

1

2

3

4

5


1

2

3

4

5

Future Date

Revenue

Annual Proft

AUM

Sandbox


1

2

3

4

5




Year Ending

Revenues

Proft

AUM

Gross Margin

Clients per

Professional

AUM per

Professional

Revenue per

Professional

Revenue per Client


1

2

3

4

5

1

2


1

2

3

4

5

6

7

8

9

10

1 6

2 7

3 8

4 9

5 10




1 6 1

2 7 2

3 8 3

4 9 4

5 10 5



Quarter 1

Revenue

Proft

AUM

New Clients

NNA

Qualifed Referrals



Revenue per Client

Deadline


Theme Name



Your KPIs Goals

1

2

3


1

2

3

4

5


CelebrationReward

1

2

3

4

5


20


















Dear Valued Client















22
















Transition Team





Client Service Team


Account Manager







Continuous

Pershing on site









24







The Firm





























26


The Firm






























The Firm



























28

BNY Mellon














pershingcom



WP-PAS-DRIA-6-17






Purpose (Why)



1

2

3

4

5

Core Competencies

1

2

3

4

5


1

2

3

4

5

Future Date

Revenue

Annual Proft

AUM

Sandbox


1

2

3

4

5




Year Ending

Revenues

Proft

AUM

Gross Margin

Clients per

Professional

AUM per

Professional

Revenue per

Professional

Revenue per Client


1

2

3

4

5

1

2


1

2

3

4

5

6

7

8

9

10

1 6

2 7

3 8

4 9

5 10




1 6 1

2 7 2

3 8 3

4 9 4

5 10 5



Quarter 1

Revenue

Proft

AUM

New Clients

NNA

Qualifed Referrals



Revenue per Client

Deadline


Theme Name



Your KPIs Goals

1

2

3


1

2

3

4

5


CelebrationReward

1

2

3

4

5


20


















Dear Valued Client















22
















Transition Team





Client Service Team


Account Manager







Continuous

Pershing on site









24







The Firm





























26


The Firm






























The Firm



























28

BNY Mellon














pershingcom



WP-PAS-DRIA-6-17




1 6 1

2 7 2

3 8 3

4 9 4

5 10 5



Quarter 1

Revenue

Proft

AUM

New Clients

NNA

Qualifed Referrals



Revenue per Client

Deadline


Theme Name



Your KPIs Goals

1

2

3


1

2

3

4

5


CelebrationReward

1

2

3

4

5


20


















Dear Valued Client















22
















Transition Team





Client Service Team


Account Manager







Continuous

Pershing on site









24







The Firm





























26


The Firm






























The Firm



























28

BNY Mellon














pershingcom



WP-PAS-DRIA-6-17




















Dear Valued Client















22
















Transition Team





Client Service Team


Account Manager







Continuous

Pershing on site









24







The Firm





























26


The Firm






























The Firm



























28

BNY Mellon














pershingcom



WP-PAS-DRIA-6-17








Dear Valued Client















22
















Transition Team





Client Service Team


Account Manager







Continuous

Pershing on site









24







The Firm





























26


The Firm






























The Firm



























28

BNY Mellon














pershingcom



WP-PAS-DRIA-6-17


















Transition Team





Client Service Team


Account Manager







Continuous

Pershing on site









24







The Firm





























26


The Firm






























The Firm



























28

BNY Mellon














pershingcom



WP-PAS-DRIA-6-17





Continuous

Pershing on site









24







The Firm





























26


The Firm






























The Firm



























28

BNY Mellon














pershingcom



WP-PAS-DRIA-6-17









The Firm





























26


The Firm






























The Firm



























28

BNY Mellon














pershingcom



WP-PAS-DRIA-6-17




The Firm





























26


The Firm






























The Firm



























28

BNY Mellon














pershingcom



WP-PAS-DRIA-6-17




The Firm






























The Firm



























28

BNY Mellon














pershingcom



WP-PAS-DRIA-6-17




The Firm



























28

BNY Mellon














pershingcom



WP-PAS-DRIA-6-17



BNY Mellon














pershingcom



WP-PAS-DRIA-6-17



Documents

Destination RIA: What to Expect and How to Prepare for … · 2020. 10. 19. · The Evolving RIA Landscape “The RIA opportunity, whether starting your own frm or joining an existing