Hybrid RIA Model

What is a Hybrid Registered Investment Advisor?

The basics are simple: A Hybrid RIA is registered as both an RIA and a broker/dealer. This dual registration allows financial professionals to operate both a fee- and a commission-based practice.

Why is this important? Clients, particularly high-net-worth clients, are becoming more sophisticated, and their needs are becoming increasingly complex. A hybrid financial professional is better suited to offer a broad range of advice-driven strategies and solutions. A hybrid financial professional can provide sound guidance on all aspects of a client’s financial position, including wealth management and inter-generational transfer.

According to Cerulli Associates:

Market Growth

6.9% Increase

In 2011 the Hybrid RIA headcount grew by 6.9%, representing the fastest growing segment of the market.

Total Assets

$921 Billion

The total assets among hybrid firms totaled almost $921 billion in 2011, representing a 19.1% rise.

Concentration

19% Hybrid RIAs

Almost 19% of all financial professionals consider themselves Hybrid RIAs compared to 29% fee-only practices.

Hybrid firms tend to attract more affluent clients, possess higher client retention rates, and generate more revenue than fee-only financial professionals.

Get the Hybrid Handbook.

Is the Hybrid RIA Model Right for You?

Hybrid RIAs enjoy a wealth of advantages, including:

Build Your Own Business

The Hybrid RIA model is an ideal solution for breakaway brokers who want the flexibility of an RIA, but also want to maintain their book of commission business.

Brand Ownership

Create a unique and solid identity for your fee business and build equity in your practice.

Fee or Commission Case-by-Case

Hybrid RIAs can choose the approach that’s right for each client and act more closely in their interest.

Grow Your Revenue

Hybrid financial professionals can deliver a more complete lineup of solutions than fee-only practices. Revenue for Hybrid financial professionals tends to be greater.

Offer What Others Can’t

More high-net-worth clients are seeking non-correlated, alternative investment options. Many of these offerings are only available through a commission structure and aren’t available from most broker/dealers.

Access More Services

Building a fee-only RIA practice is difficult. Hybrid RIAs can leverage their broker/dealer for ongoing compliance support, Errors & Omissions Insurance, technology integration, and other services.