Break Away From The Pack

What are some challenges of forming an RIA from scratch?

| Oct 4, 2021 | RIA Formation |

When you decide to leave a corporate environment to form a Registered Investment Advisor (RIA) from scratch, you probably expect to put in a lot of work. However, it is also wise to anticipate any challenges that may arise to block your way.

When you prepare for the worst, you have a much better chance of forming a successful RIA. Below, we will discuss some of the challenges inherent to RIA formation, especially when you have few resources in place.

Challenges you should anticipate

Even if you never face the situations discussed below, your confidence in knowing you have prepared can trickle down to all aspects of your company.

  • Lack of finances: Walking away from a steady income is frightening. Make sure you have a plan in place to support you and your family while your company finds clients. Some new RIA owners choose to work other jobs to support the company during these early stages.
  • Technological support: Sustaining a financial advisor business costs money, but the new technologies available to anyone operating in this sector can help enormously. Do your research and identify which of these technologies meet your needs. RightCapital and Wealthbox are just two software developers that can help your RIA operate efficiently.
  • Marketing your services. Many financial advisors do not invest very much in marketing, and this is often a mistake. Before potential clients choose your services, they need to know about the benefits of your RIA. Be sure to use social media platforms like Twitter and Facebook to spread the word about your services. You will also benefit from having a well-developed website for your business.

Of course, this post does not cover all RIA formation challenges. It is wise to learn more about forming an RIA in California and other regions of the United States to ensure you remain in compliance with existing laws every step of the way.