In this final installment, InvestmentNews Content Strategy Studio discusses the journey to becoming an independent Registered Investment Advisor (RIA) through the lens of three advisors' unique experiences. Below, Laurie Nardone, CFP® and managing principal of Shira Ridge Wealth Management in Larkspur, California, explains how she made the transition to independence and how Schwab Advisor ServicesTM served as a resource before, during, and after the move.
InvestmentNews Content Strategy Studio: Tell us about your firm.
Laurie Nardone: We're a four-person, all-female independent Registered Investment Advisor firm providing financial planning and wealth management services for about 120 households. We manage more than $120 million in assets and are based in Marin County, outside San Francisco. I started the business in 2006, and its name emerged after I climbed Mt. Kilimanjaro on a trip I made to Africa in 2005. Shira Ridge is the name of one of the longer routes to the summit, but the one that affords the highest probability of reaching the goal; the parallel with achieving financial and retirement success was so clear it inspired our firm name.
INCSS: Speaking of routes, explain your background and how you came to start your firm.
LN: I took a very circuitous route to get here. I started in the corporate world as an accountant and served as the controller of a publicly traded financial services company for many years. Then I became a Certified Financial Planner™ and started my own financial planning practice while at the same time working as a wholesaler on an independent contractor basis for a third-party asset manager. The two roles didn't conflict, but after a while it got to be too much, so I left wholesaling in 2012 and affiliated with a large independent broker-dealer where I could have a hybrid business.
After a few years, I decided that being affiliated with a broker-dealer was no longer for me. I just wanted to do what was in the best interest of my clients with my time, my money, and my staff. Instead, I often felt that I was filling out forms to satisfy the broker-dealer's compliance arm. I also felt that even though I was fee-based, I was always apologizing to a degree or doing extra explaining about why I was associated with a broker-dealer. So I decided to leave and convert my business to a fully independent RIA.
INCSS: Explain the process of doing that.
LN: I'm a planner, so I planned — for about a year. We made the move in May of 2015 because I wanted to get past the tax season. Through my experience as a wholesaler in this area for a dozen years, I got to know many advisors who had made the move, and I still have very good relationships with them. Over several months, I was able to talk to them about what they liked and what they didn't like about being independent and the custodians they chose. We also discussed why they made their choices and whether they would make those same choices again. For us, the choice came down to two custodians.
The turning point came after we spent a great due diligence day at Schwab's operations center in Arizona. I went down there expecting a dog and pony show — which we got — but we were also able to stop and speak with anyone we wanted, and we were able to get answers to our questions right there on the spot from the people who actually were doing the work in lots of different areas. I was very impressed.
INCSS: Describe the actual transition.
LN: When I was a wholesaler, I knew lots of advisors who went through the process, so I recognized that all transitions are a big deal. I thought Schwab was fantastic in this area, and by that I mean they prepared all of the necessary documents to help transition our clients to Schwab, which were extensive. In fact, one of the great things about being associated with Schwab is that there is a high level of professionalism in all aspects of what they do for us, which our clients see and appreciate. Schwab provided guidance through the entire transition process, including assigning a Conversion Consultant to help us. We organized a transition party, with clients coming in and signing papers. I can't tell you how valuable it was to have that Schwab person helping our team, because it was all new to us, and he had a great attitude, great energy, and worked really long hours as part of our team. It was incredibly helpful.
INCSS: It sounds like the transition was a success.
LN: It was; 100% of our clients followed us and our AUM rose from $45 million to $100 million in just three years. The relationship with Schwab helped us grow. Many of our prospective clients already have their assets at Schwab, so when they decide to work with us, it's very easy to just transfer the assets over and have us start managing them. It's also easy to consolidate a client's prior 401(k)s and multiple IRAs. That has helped us build our business.
INCSS: What about the ongoing level of service you receive?
LN: That has been one of the big “aha” surprises. The support we continue to receive still makes us feel terrific about Schwab. Whoever we talk to there is helpful. Prior to Schwab, we sometimes found service people who viewed our questions or phone calls as a problem, not as an opportunity to provide help. My team's experience with Schwab has been one where their information is accurate and they sincerely want to help us with our issues or questions. I appreciate that tremendously.
INCSS: Any other takeaways for advisors considering a move to independence?
LN: I have three. First, I now feel like I have found my community, which I never felt when I was with the broker-dealer. As an RIA, I've found that the other RIAs I meet through Schwab always want to learn and will always share, and they approach taking care of clients the way I do, from a moral and ethical point of view. Second, I never have to apologize to clients anymore for any perceived, hidden, or even unintended conflicts; our business is completely independent and the client is the only one for whom we work, period. Finally, independence makes a lot of sense for my clients and me; I'm sorry I didn't make the move earlier.
To find out what going independent could mean for you, visit advisorservices.schwab.com/goindependent
Schwab does not supervise investment advisors and takes no responsibility to monitor the services they provide. Schwab Advisor Services™ includes the custody, trading, and support services of Charles Schwab & Co. (Member SIPC). (1218-8N80)
This is a sponsored special feature developed by the InvestmentNews Content Strategy Studio and supported by Charles Schwab.
This content is made possible by Charles Schwab Advisor Services; it is not written by and does not necessarily reflect the views of InvestmentNews' editorial staff.