The 26 Steps I Took To Set Up My Own Independent RIA

This step is pivotal and involves a detailed analysis of the required capital, examining potential sources of equity financing, alongside diverse loan options. Key components of this research involve a detailed analysis of direct competitors, which includes evaluating their service offerings, client retention strategies, and pricing structures. Furthermore, understanding financial trends within the brokerage sector, specifically in New York — a hub of financial activities — is crucial. This involves observing market behaviors, regulatory changes, and technological advancements that could impact the business operations of a New York brokerage firm. Before embarking on the journey of starting a brokerage firm, it’s crucial to methodically prepare through strategic planning and compliance. These steps ensure a solid foundation for business operations and facilitate successful market entry.

Some brokerages offer incentives to help hire and retain top talents, like increased commission splits, a team structure, training, and support from a dedicated admin. Having a virtual office model allows agents to work remotely without a physical office space. But a brokerage in the modern era isn’t just charts, trends, and financial strategies. They ensure every client has a seamless trading experience while simultaneously fortifying your digital assets against threats.

The Process Of Breaking Away And The Broker Protocol

State penalties for non-compliance also commonly exceed thousands in initial sanctions with follow-on litigation likely. Importantly, FINRA membership further necessitates buying Securities Investor Protection Corporation(SIPC) How Are Ndfs Non-deliverable Forwards Priced coverage protecting clients if a firm fails financially. SIPC insures up to $500,000 in securities including a $250,000 cash limit per customer. Coverage above SIPC limits can be purchased additionally from private insurers.

starting your own brokerage firm

If you feel like you need extra investing guidance, a robo-advisor could be a good option. Robo-advisor annual fees can amount to 0.25% or more of your portfolio’s value, and you may also have to pay expense ratios for ETFs. You pay interest on the loan, and the investments you purchase act as collateral. Comprehensive management of employer-sponsored retirement accounts, including 401k and 403b. If you have partners, you also need to make sure you have all agreed upon revenue shares and are all jointly and severally liable for any and all expenses or potential losses.

Licensing and Registration

That’s not the only benefit; it also helps you make your business more automated, gives your business legitimacy, and makes it easier for potential customers to find and contact you. In certain instances, the amount must be at a “reasonable” level and something that the broker and their clients have agreed upon. The services sector is undoubtedly the biggest economic sector in the US as it accounts for nearly 70% of the country’s gross domestic product. You may want to use industry-specific software, such as Proactivesoft or Fidelity, to manage your accounts, transactions, and billing. If you feel overwhelmed by this step or don’t know how to begin, it might be a good idea to hire a professional to help you check all the legal boxes.

starting your own brokerage firm

Bank and SBA loans are probably the best option, other than friends and family, for funding a stock brokerage business. FINRA has a reputation for ongoing requests for documentation and constant back-and-forth communication. However, if you get through the approval process and then plan your work and work your plan, the potential rewards for a successful broker-dealer firm are high.

Decide what kind of brokerage account you want to open

Of course, while technology is pivotal, the human touch remains irreplaceable. Here’s where your customer support steps in, bridging the gap between digital efficiency and human empathy. Their interactions, guidance, and problem-solving skills reflect the firm’s commitment to its clientele. Before plunging into the brokerage realm, a thorough grasp of the market is indispensable. Begin by pinpointing a niche that resonates with your expertise and addresses a clear market demand. Given the allure of Forex and crypto, they may present enticing opportunities, but they also come with their unique set of challenges.

starting your own brokerage firm

They will check that your business name is available before filing, submit your articles of organization, and answer any questions you might have. Your business name is one of the key differentiators that sets your business apart. Once you pick a name, reserve it and start with the branding, it’s hard to switch to a new name. This could jumpstart your word-of-mouth marketing and attract clients right away. These solutions automatically track and maintain reporting requirements, issue deadline and compliance reminders, and monitor employee trading accounts.


Full service brokers offer mutual funds, stocks, bonds, commodities, and annuities. Pursue the appropriate business licenses for your local and state governing bodies. Then, consider pursuing memberships to the various required regulatory bodies, like FINRA and the SEC. The main trade-off with fees will come down to the offerings at each broker and which platform allows you the straightest path to your goals. Minimum balances and broker fees are also something to take into consideration when making your decision. High fees might be worth it if they are accompanied by personalized service that helps you meet your investment goals.

  • The Series 65 exam qualifies financial advisors lacking Series 7 certification for non-commission fee structures.
  • Two key strategies to consider are SEO and content marketing, as well as email marketing and video marketing.
  • To learn more about the importance of SEO for brokerage firms, check out our article on compliance in brokerage firm operations.
  • Setting up a trading platform is just one aspect of starting a stock brokerage firm.
  • When you decide to fund the account, the brokerage asks you to link a checking or savings account to your brokerage account, or gives you the option to wire funds to your account.

Explained why I had left Merrill and decided to start my own independent advisory firm after 7 years in the business. That I would be able to provide more customization, better technology and an overall better service offering to them. That I was experienced and prepared for the task at hand, and welcomed the opportunity to continue our working relationship. I refrained from smearing Merrill, but accurately pointed out some of the flaws in Merrill’s model. In some cases, I revised a client’s fee schedule lower as a token of gratitude for moving with me.

You can talk to your superiors to see if they can help you find out what you need, or you can do some research regarding what your state requires. Becoming a fully certified broker means you’ll have to be ready to go back to school. Don’t fret, you don’t have to go too long, but you need to study for some time before you are allowed to take the brokerage exam. With 211 locations across 52 cities and growing, WeWork has office locations around the globe. I happen to have clients outside of California, and love that I have the ability to meet them at WeWork offices in their home cities.

starting your own brokerage firm

A broker is an intermediary between an investor and a securities exchange—the marketplace where financial assets are bought and sold. Because securities exchanges only accept orders from individuals or firms who are members of that exchange, you need a broker to trade for you—that is, to execute buy and sell orders. Brokers provide that service and are compensated either through commissions, fees, or payment by the exchange itself.

Schwab is so confident with its level of customer service offered via telephone, online chat, and in-person branch locations that it offers a satisfaction guarantee to all clients if they are not completely satisfied. As an alternative to a human broker or broker-reseller, it’s worth investigating the pros and cons of using a robo-advisor. They use computer algorithms to select and manage investment portfolios, with little to no human interaction beyond the original programming—though some services are supplemented with live support from real people. These are just some things you need to keep in mind as you start your new brokerage business, but there’s much more to consider as you start.

The easiest way to get this kind of experience is to work with a brokerage firm, where they will show you the ropes so that you are more prepared by the time you’re ready to start your own. I originally went with a financial planning software that was the preferred provider at HighTower Advisors, MoneyGuidePro. I found MoneyGuidePro to be an effective planning software for my clients over the age of 50 – those clients who are often more established in their careers.

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