4 Business Models: Hybrid RIA

May 11th, 2022 | Luke Roth

Myriad Advisor Solutions breaks down the process of independent business ownership into actionable objectives to help you realize your dream. We’ve spoken before about the different independent models that advisors must consider – like registered investment advisor (RIA) and joining an independent broker dealer. The third option is becoming a Hybrid RIA.

There are two kinds of Hybrid RIA’s – a Semi-Captive hybrid and a Dually Registered Hybrid. Here are the key differences between the two:

  1. How Do I Conduct Business?
    1. Semi Captive representatives are employees or independent contractors of an independent broker-dealer (IBD) who don’t want to run an advisory-only business. The IBD provides infrastructure for you to conduct brokerage & advisory business through their affiliated RIA.
    2. Dually Registered representatives start or join an existing RIA firm as an independent contractor of an IBD. Advisors utilize this model to primarily provide advisory business and to own & grow their own practice.
  2. How Am I Compensated?
    1. Semi Captive reps are typically compensated via IBD fee schedule, based on the breakdown of their brokerage and advisory business.
    2. There’s more control on the Dually Registered side. They set the fees for their advisory services, however their brokerage business will still typically be based on an IBD fee schedule.
  3. How Much Control Do I Have?
    1. The tradeoff for having more structure and support is that Semi Captive representatives will have less control over technology, compliance, products, service, and their choice of custodian.
    2. Dually Registered representatives, on the other hand, have more control over those aspects of their business because they have less structure & support at the onset.

This is just the tip of the iceberg, there are a myriad of considerations when making the choice that is best for you. Contact us to start your journey!