What Is A W2 RIA Model?

Many people think of the RIA model as an "independent" model. This is accurate, as many pathways into the model are independent in nature. However, some RIA models feature advisors affiliated as W2 employees. These come in many different flavors: partnership models, traditional grid payout models, buyout models, etc. In this episode of the Transition To RIA question and answer series, I explain what these models are and when they may be a fit for your practice. I'm Brad Wales with Transition To RIA (TransitionToRIA.com). This is episode #155 of my question and answer series where I answer RIA related questions I get from advisors just like you. What I do: At Transition To RIA I help financial advisors and teams between $50M and $1B understand everything there is to know about WHY and HOW to transition their practice to the Registered Investment Advisor (RIA) model. RESOURCES & LINKS ___________________________________________ 🔹 Website: https://TransitionToRIA.com/ 🔹 Show notes: https://TransitionToRIA.com/what-is-a... 🔹 Contact me: https://transitiontoria.com/contact/ 🔹 List of all questions I've answered: https://transitiontoria.com/videos/ 🔹 Podcast: https://transitiontoria.com/podcast/ 🔹 Whitepaper ("11 Ways The Economics Of The RIA Model Are Superior To Other Advisor Affiliation Options"): https://transitiontoria.com/whitepapers/ 🔹 Transcription of video: What is a W2 RIA model? That is today's question on the Transition To RIA question and answer series. It is episode #155. Hi, I'm Brad Wales with Transition To RIA where we help you understand everything there is to know about why and how to transition your practice to the RIA model. If you're not already there, head to TransitionToRIA.com where you’ll find this entire series in video format, podcast format. There are articles, there are whitepapers. There's a Vendor Profile Series. All kinds of things to help you better understand the model. Again, TransitionToRIA.com. On today's episode we're going to talk about what is a W2 RIA model that you could potentially join. Now, one of the reasons I wanted to do this episode is because I previously did an episode on “what is a 1099 RIA model” to potentially join. So I wanted to give the comparative here of what the W2 version of that looks like. For those of you that are maybe not familiar with this lingo 1099 and W2, essentially at a high level, 1099 is an independent contractor status where you, as the advisor are affiliated with the RIA on an independent contractor status, often referred to as 1099. The reason we refer to these as 1099 or W2 is essentially that's the tax forms that are used to reflect what that income is. 1099 typically refers to an independent contractor model, whereas W2 is where you are an employee of a company. And so in this case, if you're affiliated with an RIA on a W2 basis, while you're a financial advisor of that RIA, you are doing so logistically as a W2 employee advisor of that RIA. And so, like I said, I previously did an episode on the 1099 model, and now we're going to talk about W2. Something I talk about frequently on these episodes is that there's a lot of different pathways you could go down potentially if you were to transition your practice to the RIA model. Some of you might end up starting your own RIA. Some of you might end up joining an RIA (which is the topic of today's episode.) There's a flavor in the middle of those. That's a big part of what I help advisors do, is understand, should you even be exploring the RIA model to begin with? And then if it does make sense to explore it, how do these three different pathways compare? They all have pros and cons. Why might you choose one pathway over the other. But as part of that process, if you conclude that joining an RIA is ultimately going to be the best path for you, well then within that pathway, there are a lot of, as I often refer to them as, “flavors” of different RIAs to choose from. Something I always suggest you do is do not jump to conclusions about what that entails. For example, if you have maybe spoken to an RIA before that you could potentially join, or you've been told about an RIA you could potentially join, well, that particular RIA, whoever that is, has a particular value proposition and a particular model that they have designed for their RIA. That is their version, their flavor, of what they feel is best aligned for advisors. But that doesn't mean that's all that's available in the marketplace. Con't..... View remainder of transcription here: https://TransitionToRIA.com/what-is-a... Disclaimer: https://transitiontoria.com/terms/