NFP Advisor Services Group Publishes Aite Study on the Key Factors in the Independent or Corporate RIA Decision for Advisors

Explores the Tipping Point When Selecting RIA Model

Apr 29, 2013, 08:30 ET from NFP

NEW YORK, April 29, 2013 /PRNewswire/ -- NFP Advisor Services Group, which provides technology, service and asset management platforms to financial advisors, including RIAs and hybrids, and is a business segment of National Financial Partners Corp. (NYSE: NFP), a leading provider of benefits, insurance and wealth management services, today published the results of a study exploring the unique structural challenges and opportunities faced by financial advisors considering whether the independent or corporate RIA structure is most profitable.


James Poer, president of NFP Advisor Services Group, said, "As financial advisors seek the best path to position their practices for long-term, profitable success, a major consideration is whether to affiliate with a corporate RIA or to establish and run an independent RIA. Both choices offer meaningful benefits and associated challenges, but ultimately the best structure will vary by practice and can only be assessed by closely evaluating the economics and operational setup of the practice as well as the personal preferences of the firm principals."

The study, commissioned by NFP Advisor Services Group and produced by leading independent research firm Aite Group, reveals that the choice to be an independent or corporate RIA can have long-term effects on a practice, including the potential to influence the practice's valuation at the time of a sale or during a succession period. It is important for advisors to understand the differences between corporate and independent RIAs, and the many pros and cons, including costs and benefits, of each structure.

  • Profitable independent RIAs require scale: Independent RIAs can achieve profitable scale once they have more than $200 million in assets under management, assuming business operations and expenses are managed efficiently. The tipping point could be even higher for advisors who lack expertise in business process and technology.
  • Revenue generation at corporate RIAs is comparable to that of independent RIAs: Revenues for advisors with a corporate RIA averaged $1.2 million vs. $1.3 million with an independent RIA.
  • Advisor income favors corporate RIAs for the majority of practices: When comparing  annual income, advisors with a corporate RIA earn more on their books of business, particularly those with a book over $100 million but less than $1 billion
  • Nonfinancial costs of independence: Compared with corporate RIAs, independent RIAs spend more time – and more resources – on compliance, technology and other operational aspects of the business. Advisors who must also focus on these aspects sacrifice time they could spend on prospecting and sales.

Poer concluded, "NFP strongly believes that both the corporate and independent models can provide the right solution for an advisor, depending on the firm's size and business mix, which is why we are steadfastly committed to providing support for both models. However, it is critical for advisors to understand the distinctions between the structures, and consider their personal preferences and priorities so they can make the best decisions for long-term success."

View the complete results of the study at

About the Study

Aite Group's independent study "The RIA Tipping Point: Corporate or Independent" is based on a survey of 161 financial advisors and interviews with advisors, evenly split between those affiliated with a corporate or independent RIA. The survey was limited to advisors who currently have, or originally had, a broker/dealer affiliation.

About NFP Advisor Services Group

NFP Advisor Services Group, a business segment of NFP, serves independent financial advisors whose clients include high net worth individuals and companies by offering broker/dealer and asset management products and services through NFP Securities, Inc., member FINRA/SIPC, and NFP IndeSuite, Inc. NFP Advisor Services Group attracts financial advisors seeking to provide clients with sophisticated resources and an open choice of products.

About NFP

National Financial Partners Corp. (NYSE: NFP) and its benefits, insurance and wealth management businesses provide diversified advisory and brokerage services to companies and high net worth individuals, partnering with them to preserve their assets and prosper over the long term. NFP advisors provide innovative and comprehensive solutions, backed by NFP's national scale and resources. NFP operates in three business segments. The Corporate Client Group provides corporate and executive benefits, retirement plans and property and casualty insurance. The Individual Client Group includes retail and wholesale life insurance brokerage and wealth management advisory services. The Advisor Services Group serves independent financial advisors by offering broker/dealer and asset management products and services. Most recently NFP was ranked eighth on Business Insurance's 100 Largest Brokers of U.S. Business; second on Business Insurance's Largest Agents and Brokers Headquartered in the U.S. Northeast; and as the ninth Top Global Insurance Broker by Best's Review. It operates the third largest executive benefits provider of nonqualified deferred compensation plans by total clients as ranked by PlanSponsor; operates a top 10 independent broker/dealer as ranked by Investment Advisor; and has three advisors ranked in Barron's Top 100 Independent Financial Advisors. NFP is also a leading independent life insurance distributor, according to many top-tier carriers. For more information, visit

About Aite

Aite Group is an independent research and advisory firm focused on business, technology, and regulatory issues and their impact on the financial services industry. With expertise in banking, payments, securities & investments, and insurance, Aite Group's analysts deliver comprehensive, actionable advice to key market participants in financial services. Headquartered in Boston with a presence in Chicago, New York, San Francisco, London, and Milan, Aite Group works with its clients as a partner, advisor, and catalyst, challenging their basic assumptions and ensuring they remain at the forefront of industry trends. Aite Group is not affiliated with NFP or its subsidiaries.