How to Alleviate the Aches and Pains of Starting a Breakaway RIA Firm

How to Alleviate the Aches and Pains of Starting a Breakaway RIA Firm | Elevate CPA Group

Many RIAs get their start by breaking away from another firm. But this doesn’t happen overnight. From navigating legal implications to establishing a new entity, breaking away can be a lengthy and complicated process. To help you break away without breaking your back, here are a few tips for getting started.

1. Seek out support.

The breakaway process could take anywhere from three to 12 months. During this time, you’ll need to do the leg work and prepare for the transition. One of the best things you can do is to seek out other RIA firm owners who have broken away and started their own firms. Ask them what they would do differently if they did it again.

2. Keep it legal.

To avoid potentially illegal activities, such as marketing your new RIA firm, thoroughly review any agreements you have with your current firm. Consider getting your legal counsel involved early on to make sure you’re in compliance.

3. Build your back office.

When you’re an employee, you don’t have to worry about paying for technology, accounting, marketing, legal, and compliance services. When you start you own RIA firm, however, this is no longer the case. (Most newly registered RIAs outsource these services.)

Your new RIA firm will need back-office support immediately. Once again, consider getting your legal and compliance team members in place as soon as possible. These professionals can help ensure the proper legal structure of your firm as well as its registrations and filings.

4. Establish your operations.

When you get the green light to begin working on your own, it’s important to be ready. This means you’ll need to have your firm name (and potentially a trademark), website, email accounts, and insurance policies in place.

5. Communicate with your clients.

Once you’ve officially resigned and broken away into your new firm, it’s time to let your clients know. (Again, in accordance with any agreements with your former firm.) Your message to your clients should convey what your transition means for them and how they can benefit. Be sure to keep it positive. This message should be 100% about your new firm and not your former employer.

Secure the support you need.

If you’ve thought about breaking away or have started the process, Elevate CPA Group is here to help. From advising you on entity types to making sure your firm’s books and records are set up in compliance with the SEC, we’ll guide you through the journey. We can also support you with monthly financials and analyze industry trends to inform your next move. To find out how we can help ease the burden of starting a breakaway RIA firm, contact us today.