Broker Check

What is a Hybrid RIA?

What Does Hybrid Mean?

  • A Hybrid Advisor is a person who is a representative of both a Registered Investment Advisor (RIA) entity and a Broker/Dealer (BD).
  • A Hybrid Advisor can provide commission services through a Broker/Dealer and may choose to leverage a corporate RIA or establish a Hybrid RIA firm that they own, brand and operate for all their fee-based business.
  • A Hybrid RIA is an independently registered firm owned and managed by a(n) Hybrid Advisor(s).

According to data from Cerulli Associates a financial services research firm, as of the end of 2013:

  • There were 24,825 Hybrid Advisors. A 9% annual growth rate between 2008 to 2013 – the fastest growing segment of the market by far.
  • Hybrid RIA’s managed more than $1.1 trillion in assets. A 14.4% growth rate from 2008 to 2013

Why Work With a Hybrid Advisor?

The financial services landscape is constantly evolving. As the industry evolves, so must the advisor. Hybrid advisors or “dually registered advisors” operate as investment advisor representatives, typically charging fees for some clients, and as securities brokers, typically charging commission for others.

In 2016, the Department of Labor became focused on drafting legislation to require advisors to act in the best interest of their clients. Registered Investment Advisors have a fiduciary duty to always act in the best interests of their clients.  

"The RIA and dually registered advisor channels are the only ones that had a positive annual growth rate in advisor numbers over the last five years. The growth is mostly from attracting advisors out of other channels." – Cerulli Associates

Every client is different. As such, a client's advisor requires the flexibility to provide the products and services necessary to help a client work towards their investment goals and objectives. Flexibility is key. A Hybrid RIA allows for a RIA platform for asset management and financial planning; and a broker/dealer solution for commission-based securities, insurance and alternative investment business.

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. Some of this material was developed and produced by FMG, LLC, to provide information on a topic that may be of interest. FMG, LLC, is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.

Copyright 2017 FMG Suite

The Financial Consultants of Perennial Financial Services are Registered Representatives with and securities offered through LPL Financial. Member FINRA/SIPC. Investment Advice offered through Perennial Investment Advisors, a registered investment advisor. Perennial Investment Advisors and Perennial Financial Services are separate entities from LPL Financial.

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