June 27, 2013 by Kyle Pieper
Have you toyed around with the idea of becoming securities licensed?
If the process seems overwhelming, or you’re wondering what the benefits would be to your practice to take on the responsibilities of providing investment advice for a fee, consider these five reasons to make the jump into becoming an investment adviser representative (IAR).
An IAR is a Series 65 licensed individual who can provide fee-based investment advice. That includes:
- Collecting a fee for hourly advice.
- Collecting fees for managing portfolios.
- Collecting fees for a financial plan that includes investment advice.
Number one: Reduce your risk. The Arkansas and Iowa insurance divisions already have ruled that insurance professionals who talk to their clients about using securities products could be in violation of state securities rules and therefore subject to fines. Industry experts expect other states to move to adopting the same rules. Earning a Series 65 license allows you to discuss securities products.
Number two: Become a more well-rounded resource for your clients. An IAR has the ability to look at a client’s entire financial picture, rather than just from insurance or accounting perspective. An IAR becomes a comprehensive adviser and more importantly, can develop a much deeper relationship with that client.
Number three: Build relationships. Having the ability to offer your clients a broad array of advice and solutions gives you the chance to build a lasting relationship with them, and could mitigate the risk that they’ll take their financial planning business elsewhere. Give them a reason to think of you as more than an insurance professional or accountant.
Number four: A recurring revenue stream. Once you begin to earn the fees associated with your assets under management (AUM), you have created an annual revenue stream. Even if those assets have little to no growth, you continue to earn a percentage of the AUM.
Number five: A retirement strategy. Take a look inward and ask yourself if you’ve properly prepared for your own retirement. Will you be able to sell your business when it’s time to retire? Income for commission-based sales stops the day that you stop selling. In contrast, a fee-based business builds equity over time, increasing its value when you’re ready to sell.
Don’t be overwhelmed by the process of becoming registered as an IAR. Instead, give me a call and we can talk about whether making this transition is right for you and more importantly, if it’s right for your clients.
Securities and investment advisory services offered through Brokers International Financial Services, LLC, Panora, Iowa. Member FINRA/SIPC. Brokers International Financial Services is a strategic partner of Brokers International, Ltd.