Bill Hart is a "breakaway RIA" - and he's happy to share with you why he left his broker-dealer: too much control and too little value. Bill and his practice partners simply couldn't get past certain "speed bumps" that were disruptive to his internal business practices and relationships with clients. If those speed bumps had come with a lower price, things might be different - Hart says he was giving 25% of his fee revenue to his b-d and felt like he didn't receive that much value for it. What would "bring him back?" Said Hart: "the entire back office taken away - advisors/RIA firms can be 'thin' in staff and resources." As for the move to the more "up market" clientele, Hart did acknowledge that his firm is now part of the problem of smaller, "main street America" clients left out because they can't afford a firm like his and he can't afford a big block of clients like them.
Hart was joined on the "Breakaway RIA" panel by Tom Selman, a senior staff member at the NASD, who offered some interesting observations: the NASD probably needs to completely revisit the C-share issue..."the rest of the world" - specifically, Europe, where Selman once worked, as general counsel for the European Union - finds it unbelievable that the U.S. has 2 regulatory systems . . . for those who think life under the SEC-only would be better, Selman pointed out that the SEC has almost no comment period for its rules and very little "engagement" by outsiders.
Selman said he believed the 2 significant risks a solo RIA faces are failure to grow and, paradoxically, growth itself.
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