An Advisor’s Guide: The Transition to a Hybrid RIA

90 of RIA's are glad they made the transition.


For many of us as advisors, the early years in the business were somewhat simpler. We got into financial advising because we loved the work and we cared about the people. But do you ever feel that the business of advising gets in the way of the work itself?

To the advisor who is looking for a better way to do business, we’re covering one important question.

Should you consider making the change from your current business model to a Hybrid RIA or even RIA only?

There’s a Reason the Market is Moving Towards Hybrid RIA & Away From Broker-Dealer

Over the last ten years, financial advisors have been gravitating to Hybrid RIA models at a remarkable rate. The Hybrid RIA model is the fastest growing option, seeing a nearly 10% annual growth in the number of advisors and just shy of 15% annual growth in assets under management.

From a recent report from Cerulli Associates:

“The RIA and dually registered advisor channels are the only ones that had a positive annual growth rate in advisor numbers over the last five years. The growth is mostly from attracting advisors out of other channels.”

While there are many initial questions you may have before you entertain the idea of transitioning from one model to another, this discussion is specifically to help advisors gain a clearer understanding of the benefits and challenges of such a transition.

Benefits of Becoming a Hybrid Advisor in a Hybrid RIA

As the fastest growing advisor segment, the Hybrid RIA model is familiar to most in the industry. It allows advisors to be representative of both a Registered Investment Advisor (RIA) entity and a Broker/Dealer (BD). While there are a variety of reasons that attract advisors to consider a Hybrid RIA model, there are three main ones we’ll highlight today.


Access to Both Fee-based and Commission-based Products

The primary difference from the Broker-Dealer model is the fiduciary responsibility (and privileges). With access to fee-based products as well as commission-based products, Hybrid RIA’s can offer their clients a wider variety of financial vehicles to accomplish their goals.

More Autonomy to Develop Your Business on Your Own Terms

A second reason advisors are making the transition is in large part because of the freedom the RIA and Hybrid RIA ecosystem provide. And it’s not just the freedom to build your business in a way that better serves your clients.

It’s the freedom to develop your business model independently – to design a business that best serves your clients and supports you. That kind of autonomy comes with responsibility, but for most advisors, that responsibility is welcome. It’s reflected in an incredible 90% of advisors who switch to an RIA model are glad they made the change.

Challenges to Consider in Going Hybrid RIA

As the old saying goes, “Freedom is never free.” But in this case, we believe it’s worth it. The key is being aware of the challenges you will need a solution to. Here’s an overview of some of the key areas you will need to be prepared to encounter.

Have a Plan to Manage Compliance

One of the challenges of retaining your Broker-Dealer access is a heightened compliance burden. Your team – internal or external – needs to have a clear view of what that will entail. The cumbersome weight of BD compliance is a driving factor in the more efficient RIA-only segment, but with the right support in place, many advisors feel that the access to BD products is worth it.

Beyond the world of compliance, you also need a reliable administrative team in place to handle the logistics of servicing your clients’ needs. There are a variety of ways to do this:

  1. Hiring new support staff to run your operations in house
  2. Leveraging industry-specialized back-office support
  3. Joining a well established RIA with immediate access to staff and systems

Options 2 and 3 are increasingly popular among transitioning advisors because of their efficiency. You can more easily find specialized support in specific areas you need it such as:

  1. Compliance Support
  2. Investment Management

Whether you select your support a-la-carte or join an established RIA, you can still reap the benefits of the Hybrid RIA model without having to tackle the administrative burden head on.

Providing Your Clients with a Robust, Integrated Tech Stack

The last area we want to mention is the integrated tech stack the modern advisor’s client has come to expect.

This presents a unique challenge because like changing your business model, the transition process requires bandwidth, time, and money. Enough so that you would rather not have to do it twice in a row. The problem is vetting each vendor and making the right selection for yourself.

Similar to the administrative team, there are multiple ways to approach the problem. You can:

  1. Approach the problem head-on and run your own due diligence to select the best fit for your practice.
  2. Get cost-efficient access to a pre-vetted tech stack that serves your clients well and integrates with your business.

If it sounds like we’re partial to the second option, it’s because we are. Every advisor is different with different preferences, but we see the value of not reinventing the wheel.

WealthPlan Group LLC is comprised of two RIA’s whose total assets are close to 4 billion. We’ve had to do our fair share of due diligence. We’ve learned through disappointment and through success, and we offer access to that tech stack to advisors.

To make the arrangement better, the cost burden is lighter because of the shared access under our corporate umbrella. Our out-of-the-box tech stack gives you access to:

  • Portfolio Management (Orion)
  • Client Portal (MyWealthPlan, eMoney, or Orion)
  • CRM (Salesforce)
  • Held-Away Asset Aggregation (FeeX/Pontera & AdvicePay)
  • Custom Client Proposal Generator (our Advisor Marketing Portal)
  • Financial Planning (eMoney or Orion Advizr)
  • Investing Risk Tolerance (Riskalyze)

You are welcome to do your own due diligence, but if access to an established tech stack is appealing, let’s have a conversation. You can examine our real-life use of our tech stack and consider for yourself if it’s a fit for you.

WealthPlan Group LLC and its affiliated corporate Registered Investment Advisors are not affiliated with any of the companies mentioned as part of the tech stack.

The Decision to Go Hybrid RIA

The decision to transition to a Hybrid RIA is a significant one, requiring a substantial amount of preparation, bandwidth, and attention to detail. If 90% of advisors who went RIA still say they are glad they did, it’s worth exploring.

At WealthPlan Group LLC, we help advisors explore what it takes to transition business models. WealthPlan Group is a holding company that operates two RIA’s – one of which operates in a Hybrid model.

We’re deeply familiar with each model, and we are happy to help answer any questions you have about what each transition entails.