#FASuccess Ep 416: Avoiding The Compliance Headaches When Going RIA By Choosing A ‘Supported Independence’ Corporate RIA Platform, With Fran Toler

Nerd's Eye View | Kitces.com

Welcome everyone! Welcome to the 416th episode of the Financial Advisor Success Podcast!

My guest on today's podcast is Fran Toler. Fran is the CEO of Toler Financial Group, a DBA firm under the RIA Rossby Financial, in Silver Spring, Maryland, that oversees nearly $200 million in assets under management for 280 client households.

What's unique about Fran, though, is how she decided to transition from the independent broker-dealer model to a 'supported independence' corporate RIA platform in order to avoid the compliance headaches involved in being a totally independent RIA while reducing the drag of platform fees on her firm's profitability by finding a platform that wouldn't charge her for services that her staff were already performing in-house anyway.

In this episode, we talk in-depth about the moment of realization Fran had when she line-itemed out the annual costs of operating under her previous broker-dealer and discovered that it added up to $500,000 per year (or 25% of her revenue) when accounting for grid payouts, technology fees, and the cost of their trading platform, how Fran's desire to not have to be responsible for her own compliance responsibilities (based on her lack of interest in taking them on and the time involved in doing so) led her to choose to operate under a corporate RIA instead of pursuing independence as her own standalone RIA, and why Fran chose a relatively streamlined supported independence model that provides just the key compliance and software tools she needs rather than alternative offerings that provided more service but were more expensive and redundant to the staffing she already had in place.

We also talk about how Fran's decision to be upfront and public about her progressive social and political stances has allowed her to attract both employees and clients seeking a firm with these values (helping her 10X her AUM in just the past 9 years… after it had taken her 14 years to get her first $20M using the traditional approach), why Fran believes that building a more diverse advisor team will help her firm be better prepared to serve a more diverse range of clientele in the decades to come (as the demographics of those seeking financial advice change over time), and why Fran, instead of taking an 'eat what you kill' approach with new advisor talent, pays her newly hired financial advisors a livable base salary in order to attract potential candidates who might be talented but lack either natural connections to wealthy prospects or simply don't have the financial means needed to get by while they build their client base and revenue to be long-term successful with the firm.

And be certain to listen to the end, where Fran shares how she has laid the groundwork for a succession plan where team members (including both advisors and other key personnel) buy multiple tranches in the firm before she eventually steps aside, how Fran serves both her firm and the community by being willing to meet for an hour with any prospect who reaches out to her (but is very firm about her minimum pricing to work with each client so the business remains profitable and sustainable in the long run), and how Fran's previous work as a midwife has helped her nurture long-term trusted client relationships as she has navigated successfully into the world of financial advice.

So, whether you're interested in learning about transitioning from a broker-dealer to a 'supported independence' model, how to choose among available corporate RIA platforms, or how a firm can generate prospect leads by being vocal about its values, then we hope you enjoy this episode of the Financial Advisor Success podcast, with Fran Toler.

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