Does your RIA custodian share your goals?
If your RIA is one of thousands currently navigating a custodian merger, you’re facing a difficult challenge. You need to carefully carry over important data and account information, consistently communicate updates on the move to clients, and learn an entirely new service and technology ecosystem.
It can be easy to get caught up in the shuffle – go, go, go until the transition is finalized, putting out fires as they arise just to get to the finish line.
While it may be tempting to just power through the move, it’s important to take a step back and evaluate a key component to the advisor-RIA custodian relationship: culture.
Service is a Culture, Not a Transaction
A custodial relationship is about more than technology and trading execution, it’s also about service and support.
Advisors can learn a lot about their next RIA custodian by evaluating the provider’s approach to service. Are they invested in the success of each and every RIA? Are they willing to invest the resources advisors need to succeed and support their clients? Do they employ knowledgeable and dedicated support personnel that will help advisors tackle their challenges and seize their opportunities?
Every provider has a slightly different approach to service. Some firms devote resources to support each RIA. Others may place a bigger focus on serving the largest advisory practices with a tiered service structure.
A tiered service structure can have a few outcomes for advisors:
- Automation in place of service – firms with a comparatively smaller AUM may be forced to work with automated service solutions like chatbots.
- Call center or bust – if a smaller firm does have access to real people for support, those service personnel may be hidden behind a complicated phone menu or long hold queue.
- Less training, less support – if a RIA does have access to dedicated support personnel, they may not be as well trained as the support team members serving larger advisory firms.
RIA custodians that employ a tiered approach to service prioritize the size of RIA assets. Culturally, these providers may care about delivering top-tier service only to the advisors that they deem to be most profitable to their business.
While these providers could be growth-oriented at their core, they may not invest the resources to help all RIAs reach the next level for their business, and instead may primarily focus on helping the big firms get even bigger.
Is that a culture that would support your RIA?
RIA-Focused Culture, Or Split-Focus?
Another indicator of RIA custodian culture is how the provider approaches its business – specifically, are they 100% focused on RIAs? Or do they have multiple business lines that could split their attention?
Many big-name custodians operate a retail business channel in addition to providing custodial services to RIAs. With this split-focus, these providers divide their time between developing services and technologies for advisors and developing services and technologies for individual retail investors.
This can result in RIA custodians developing and delivering solutions that may not make the most sense for RIAs.
These could be flashy offerings like zero-fee trading. Zero fee trading plays well on a billboard and can be a big draw for retail investors but may not lead to the best pricing structure for RIAs and their clients.
Custodial service providers that have a RIA-focused culture may instead work hand-in-hand with advisors to develop a personalized pricing structure designed facilitate the success of their unique firm. These personalized pricing proposals could be a better fit than a one-size-fits-all rate sheet that doesn’t take the advisor’s specific situation into account.
Additionally, RIA custodians that operate a retail channel face a potential conflict of interest. These firms are looking to attract individual investors, perhaps the same investors that RIAs are looking to bring on as clients. Did someone say awkward?
These potentially competing interests can spell big trouble for a RIA-custodian relationship, and could lead to a cultural clash.
How can an advisor develop a deep and productive long-term relationship with their RIA custodian if that same custodian is marketing to and trying to attract their clients and prospects?
TradePMR’s Culture: RIA-Centric Service to Facilitate Growth
TradePMR has no tiered approach to service and no retail channel.
Rather than dictating which advisors deserve strong service, the firm takes a consistent approach across all RIA relationships.
Every advisor that works with TradePMR, regardless of size, receives high-touch 1:1 support from the firm’s experienced service teams. The support team members working hand-in-hand with advisors take the time to understand the RIA’s unique business, challenges, and opportunities. These team members know the advisors and their teams by name and are empowered to help them address their needs.
With a 100% focus on serving RIAs, TradePMR is able to devote the time and energy necessary to build solutions designed to help advisors grow and thrive in today’s hypercompetitive market. This focus has resonated with the industry, and TradePMR’s Fusion platform has been a top-rated custodial platform by advisor satisfaction three out of the last four years1.
Ready to Experience TradePMR’s Culture?
If you’d be interested in learning more about TradePMR’s approach and how the firm supports RIAs nationwide, we should talk.
We can dive into your unique business, your goals, and if TradePMR could be the right fit to service your team.
1 T3/Inside Information Survey, Joel Bruckenstein and Bob Veres, May 2022, sponsored by AssetBook, Holistiplan, Advyzon, Addepar, and Fidelity Investments, T3/Inside Information Advisor Software Survey, Joel Bruckenstein and Bob Veres, March 2021, sponsored by Salesforce, and 2019 Software Survey, Joel Bruckenstein and Bob Veres, January 2019, sponsored by Orion Advisor Services and Morningstar, Inc.
