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Concerns over regulatory challenges are way overblown

Thursday, December 10, 2009 – 5:17 AM by Brooke Southall
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Tom Giachetti: Brokers say: Tom, Do I need to repay that loan and the answer is ‘yes’.

Mentioned in this article:

Stark & Stark
Legal Services for RIAs
Top Executive: Tom Giachetti




Frederick Van Den Abbeel

Frederick Van Den Abbeel

December 11, 2009 — 9:05 AM

Great article Brooke. My experience at TradePMR confirms Mr. Giachetti is a good source of knowledge. I echo his view. My biggest question is whether he advocates leaving the wirefirm first before starting the RIA Registration Process or does he advocate staying with the firm while starting the RIA registration process? I’ve always told the Wirehouse Advisors I work with to leave first, register later because if they start the process while still employed, they could be found liable for establishing an unauthorized business activity and the firm might have a good reason to terminate for cause. I know some firms setup the RIA for the sole benefit to the Advisor and sell it back to him/her for $1 but I’m not sure how ethical that is and how the Regulators view that type of transaction.

John Oscar Golden

John Oscar Golden

December 14, 2009 — 4:21 PM

Which states allow you to pracice with just a CFP? I’m looking to start a RIA and charge by the hour only. I donot plan to custody assets.

Brooke Southall

Brooke Southall

December 15, 2009 — 12:19 AM

Fred and John,

Let me see if I can get definitive answers. I put my opinion then deleted it. I wouldn’t want to misguide in the legal realm.

Brooke

Erick Zanner

Erick Zanner

February 14, 2013 — 5:00 PM

One item that was left out was getting health insurance for your biz – that was probably the hardest thing we had to do. Everything else was easy by comparison.

Brooke Southall

Brooke Southall

February 14, 2013 — 6:08 PM

Hi Erick,

That’s interesting.

It sounds from your tone that there’s enough to the story to be worthy of an RIABiz column?

cheers,

Brooke

nelson

nelson

September 6, 2013 — 5:48 PM

If I get my series 65 and start an RIA firm can I pick stocks for investors.

Thank You,
Nelson

Jack Waymire

Jack Waymire

September 6, 2013 — 7:36 PM

Hi Nelson:

Money managers are RIAs who build portfolios of securities, mutual funds, hedge funds, and other investments for their clients. You determine what is bought and sold. The transactions are handled by your custodian’s clearing relationship. You do not process the trades yourself because you will not have a B/D relationship.

Jack

nelson

nelson

September 6, 2013 — 7:51 PM

Ok, so tell me if this would be wrong/illegal:

If i my clients were to setup their own accounts and i make trades by accessing their accounts and then charging a fee??

I’m in the process of getting my series 65 study guide to begin the process.

Jack Waymire

Jack Waymire

September 6, 2013 — 7:59 PM

My understanding from members of the Paladin Registry is your client opens an account at one of the custodians (Schwab, Fidelity, Pershing, TD Ameritrade). The investor does or does not give you discretionary authority to make trades without his approval in advance. If you are given discretion you have what is called a Limited Trading Authority. You contact the custodian and tell the trader what to buy or sell for the investor’s account. You receive copies of confirms so you can update your records.

nelson

nelson

September 6, 2013 — 9:04 PM
Ok, so to be clear even if i have limited trading authority I MUST ALWAYS call the trader??

I cannot make trades on my own even though I would have “limited trading authority”??

Jack Waymire

Jack Waymire

September 7, 2013 — 2:21 PM

That is my understanding. If you have discretion you are acting as a portfolio manager. You determine what is bought and sold in the portfolio. You contact the custodian’s trading desk to execute transactions. There are no transaction commissions. If you don’t have discretion the investor has to approve buys and sells before there are any transactions. Then the process is the same.

You may be crossing RIA and stockbroker. If you want to trade accounts and receive commissions you would need a Series 7 that is held by a B/D.

Michael Weiss

Michael Weiss

August 8, 2018 — 12:15 PM
Most people who I work with on the series 65 exam come from insurance backgrounds. They typically offer their clients insurance products but some of them also offer mutual funds and variable annuities. These people are typically are registered with their series 6 and 63 (not all states require the 63) The series 65 exam can be challenging for some people. If you need help, you might want to consider working with a tutor. We, at <a href="http://www.series65examtutor.com" rel="nofollow">http://www.series65examtutor.com</a> , have been helping people with the series 65 for several years.

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