The “kind of sort of independent” advisor…Part VIII (RBC, Suntrust, & First National)

So as we move into part VIII of our blog, we thought it best to consolidate “like” broker dealer firms.  We are starting to sound like a broken record a bit as you are seeing that many “independent” advisory firms are anything but.  These soft dollar revenue programs are allowed because they technically don’t derive the revenue directly from the client.  That being said, we are seeing a shift in the industry to firms like ours that don’t accept any soft dollar compensation.

This has the long term effect of allowing us to not only be completely independent which is our primary focus.  It also has the ability to allow us to highlight to those vendors that work with us that it is actually less expensive for them and they should consider that in their pricing for our institutional clients.  The three groups we are looking at today all are from the banking channel.

Suntrust highlights their revenue sharing arrangements on page 9 Suntrust Rev Share for both fund offerings and platforms.  RBC highlights their fund revenue sharing arrangements on their site and can be viewed on page 1 RBC Fund revenue and First National has actually aligned with an outside broker dealer named Cetera.  Cetera highlights their Strategic Partners program on page 18 of their adv Cetera ADV.

What you are starting to see we hope is that independence is based on more then a simple statement delivered in a sales meeting.  We have never heard a meeting that didn’t include the words independent advice but rarely do these additional details see the light of day in those presentations.  As a retirement plan sponsor, it is imperative you are asking the tough questions.