I'm Brad Wales with Transition To RIA. This is video #52 of the Transition To RIA video series where I answer RIA related questions I get from advisors just like you.

There are fun and exciting parts to transitioning your practice to the RIA model. To name a few:

- How will you brand and market your new practice?
- With newfound flexibility, will you add to your service offering?
- Are there additional client profiles you’d like to target?

Also important is how you handle the necessary blocking and tackling of having a new firm.

In my latest RIA explanatory video, I am joined by attorney Richard Chen where we discuss how to structure the ownership of your new firm to address both initial needs, as well as to ensure flexibility going forward.

Among other topics, we discuss:

- What type of ownership structures are used.
- How to accommodate multiple owners, both present and future.
- Why and how you need to be using an Operating Agreement.

What I do: At Transition To RIA I help financial advisors understand everything there is to know about WHY and HOW to transition their practice to the Registered Investment Advisor (RIA) model.

RESOURCES & LINKS
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🔹 Website: https://TransitionToRIA.com/
🔹 Contact me: https://transitiontoria.com/contact/
🔹 List of all questions I've answered: https://transitiontoria.com/videos/
🔹 Podcast: https://transitiontoria.com/podcast/
🔹 Whitepaper ("11 Ways The Economics Of The RIA Model Are Superior To Other Advisor Affiliation Options"): https://transitiontoria.com/whitepapers/

🔹 Transcription of video:

Brad: How to structure the legal ownership of an RIA? That is today's question on the Transition To RIA question and answer series. It is episode #52.

Hi, I'm Brad Wales, with Transition To RIA, where I help you understand everything there is to know about why and how to transition to the RIA model.

On today's episode, we're going to talk about how to set up the legal structure of the RIA from an ownership perspective. I've done a number of episodes on how to set up the RIA itself from a logistical standpoint.
You typically work with compliance consulting firms or specialized attorneys that help you with that. There is a whole process, a whole timeline, steps involved of how you set up the RIA itself. Like I said, lots of episodes I've done, you can learn more about that.

What we're going to talk about today is, and this is a question I get often, who can technically own the RIA? Can I own it in my individual name? Is that an option? What happens if there's me and other partners? Can we set it up in the name of an entity, an LLC, or something like that? And why might we want to consider doing that?

That's what we're going to be talking about today because it is something that comes up quite often and is an important part of starting up your own RIA firm and checking those boxes.

So with that, I have a wonderful guest on today, any of those watching on screen can see, a good friend, Rich Chen, with the Richard L. Chen law firm. Rich, thank you for joining us.

Rich: Hey thanks, Brad. It's great to be here.

Brad: I think we're going to have a great conversation. I'll ask Rich to give a background on himself and his firm here in just a second.

This is something that is important to think through, and this is the classic case of the blocking and tackling of starting up your own firm. There's certainly things that are more exciting about starting up your own firm, maybe the marketing and how I'm getting a new brand, and how I'm going to position myself in the marketplace.

But there's also a lot of check the box type things that are very important to get right on the front end. Not only because what might be required today, but also forward-looking of… "I want to position myself well because as things change over time, I don't want to put up any hurdles in place now that could come back to bite me."

Part of that is… "How do I set this up from an ownership structure?" That's what we're going to be diving into here. So Rich, if you can give us a brief background on yourself and your firm, I think that'd be quite helpful.

Rich: Absolutely, Brad. I've been a practicing attorney since 1998. I've been working in investment management for more than two decades. I founded Richard L. Chen PLLC, about two and a half years ago.

We serve predominantly SEC registered investment advisory firms with all kinds of strategies. We provide a broad scope of compliance, program development and management services, SEC mock audits, SEC registrations and representation, and SEC exams. Con't.....

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