Are You Considering Breaking Away?

The number of advisers considering breaking away from a traditional broker-dealer business model is on the rise. According to the latest research from Echelon partners, last year alone, more than 400 teams broke away from their broker-dealers to go independent, with over 15% becoming their own RIAs.

There are several factors that have impacted the growth in RIA formations. These include, but are not limited to:

  • An aging adviser community
  • Growing technological challenges
  • Increased regulatory oversight

Moreover, the cost of operating an investment adviser tends to be much less expensive than with an RIA. In April 2016, JLG authored a Legal Risk Management Tip entitled, ” Breaking Away: Vital Considerations for the Transitioning Advisor.”  This is a must read for those advisors who are contemplating this move.  Among the tips, you must consider existing legal contracts with employers, promissory note payback provisions and the regulatory requirements for owning your own advisory firm. Given all the rules affecting the financial industry, it is important to have a thorough understanding of the regulatory considerations before breaking away.  To find out more information and how JLG can help you, please contact us at 619.298.2880 or info@jackolg.comSee Investment News, “RIAs merging at a record clip, more breakaways become RIAs” (Jan. 18, 2017) available at

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