Is there a difference between Registered Investment Advisors (RIAs) and the big national firms?


Yes there is.

Registered Investment Advisors (RIAs) are not the same as the big national firms. RIAs are not the same as the companies that make investment products. We are not the same as those who sell those products as their primary function.

If you have ever worked for one of the big national firms, like I have, you’ll know why headquarters refers to the brokers in their branch offices as the “sales force.”

RIAs are not product manufacturers, that’s the job of mutual funds and the major investment firms. Nor are we financial products salesmen, that’s the job of brokers who work for the “Big Box” brokerage firms. Some of the products that the financial services firms produce are great, and we’ll use them when they fit our clients’ needs. But some of them are bad and have given the financial services industry a bad reputation.

RIAs have other, more important, duties. We don’t work for product manufacturers. We work for the elderly widows, for retirees who depend on their savings to live, for the middle aged who are hoping to retire some day, for the young couple starting out to raise a family and buy a home. We work for our clients; they are the ones who pay us, not the big firms on Wall Street.

The financial services industry works with faceless masses of people and depends on big numbers to make its money. The typical RIA works with small numbers. A few at a time, and we usually know each of our clients personally.

The financial services industry simply can’t supply full-spectrum custom responses to individual needs. It can’t use its hard-won experience to guide its clients though some problem that has cropped up in life.

The financial services industry hopes that ultimately you will be satisfied with a computer program or the clerk at the other end of a toll-free number because they have lots of practice designing computer programs and setting up call-centers. But answering your question about college expenses for your children or helping your choose a senior living facility is not a profitable use of their time.

So if you want to be part of the “thundering herd,” work with the people at the Big Box stores. Their duty is to sell you “suitable” products. But if you want to work with someone who is a Certified Financial Planner™, who isn’t going to sell you the product that his company is currently promoting, who is going to take the time to know you personally, check the RIA community. They work for you, not Wall Street.

Arie J. Korving, CFP Co-founder, Korving & Company 3


Arie J. Korving, a CERTIFIED FINANCIAL PLANNER™ professional, has been delivering customized wealth management solutions to his clients for more than three decades. Prior to co-founding Korving & Company, he was First Vice President with UBS Wealth Management and held management positions with General Electric.

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