Securities America and NorthStar Financial Services Group said Thursday that they had formed Arbor Point Advisors, a joint venture that aims to "fill the gap" for independent advisors looking to operate via a hybrid-business model with a choice of custodial firms and without the need to run their own RIA, according to partners.
Arbor Point Advisors is a new SEC-registered investment advisory firm with an integrated platform that lets hybrid advisory firms serve fee-based clients through TD Ameritrade (AMTD), Charles Schwab (SCHW) and Fidelity Institutional, for instance, while also maintaining their clients with commission-based accounts.
"The challenge advisors face in running their own RIA is the significant time spent on compliance, technology and administration – time they aren't spending with clients," said Jim Nagengast (left), CEO and president of Securities America, in a statement. "We saw a need in the market for a turnkey RIA with a custodian-agnostic platform, and we partnered with another Omaha-based industry leader, NorthStar, to create an innovative and compelling solution."
According to Cerulli Associates, RIAs are expected to administer about 14% of total client assets by the end of this year, the partnership says. In addition, several large RIA firms have joined forces in the past decade or so to lower their overhead costs.
While RIAs with $1 billion or more in assets are able keep their costs under control thanks to the size of their asset base, many independent RIAs have a harder time coping with the overhead and associated issues of such an infrastructure. This situation prompted Securities America, which is owned by Ladenburg Thalmann (LTS) and has about 1,700 affiliated reps, to work with NorthStar in devising a platform for advisors with $50 million to $250 million in assets, says Arbor Point President Curtis Reed, CFP.
