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Knowledge Bank

Financial industry news and events for RIAs.

4 min read

8 Pricing Questions to Ask Your Prospective RIA Custodians

Oct 1, 2022 11:45:00 AM

Before you sign on the dotted line, know what you’re paying for, and don’t be afraid to negotiate.


When evaluating prospective RIA custodians, advisors are often bombarded with information. Expansive technology breakdowns, overwhelming vendor lists, and confusing rate sheets.

It’s no wonder RIAs can get confused about what they’re really paying for with their custodial service providers.

Perhaps they were sold with promises of “zero-fee” trading but have come to find out after transitioning that zero-fee doesn’t necessarily mean free. Or maybe their provider failed to highlight the technology fees, or the added expenditures required to leverage the platform to its fullest capabilities.

8 Pricing Questions for Your Next Custodian

Before RIAs sign on with a new provider, they should take the time to ask a few key questions to get the full scoop on the RIA custodian’s pricing structure.

  1. How do you decide how to price your offering for my RIA? Am I getting the same pricing model as other RIAs?
  2. What factors impact the pricing for my RIA?
  3. Do you have flexibility in your approach to pricing? Can we have a conversation to determine if your pricing structure will fit how my firm operates?
  4. Do you offer both ticket-based and asset-based pricing? Can you help me figure out what model makes the most sense for my unique RIA?
  5. Do RIAs need to pay a technology fee to leverage your platform?
  6. Do you have add-on features for your technology that require additional expenditure?
  7. Do you offer zero-fee trading for equities and ETFs? What are you trading prices for other types of assets?
  8. How often do you review pricing arrangements with RIAs? Is there an opportunity for that pricing model to evolve over time?

Diving into these points will help the RIA to determine not only the price they would be paying to work with that RIA custodian, but also how invested that provider is in the success of the advisor’s firm.

Custodial service providers should be 100% focused on helping RIAs succeed. If a prospective provider has a one-size-fits-all approach to pricing, they may not have your best interests at heart.

How TradePMR Approaches Pricing for RIAs

At TradePMR, pricing begins with a conversation.

Before the team can figure out what pricing makes sense for a RIA, they first need to determine how the RIA operates. RIAs can expect questions like:

  • What’s your team structure?
  • What has been your growth trajectory in recent year? What are your growth goals?
  • How many clients do you have? What is your average client asset level?
  • What is your ideal client persona? What are their goals?
  • Do you handle portfolio management in-house or do you outsource? How does your team trade? What types of RIA trading tools do you leverage to manage client portfolios?
  • What asset mix is common in your client portfolios?

Only by diving into these key points can the TradePMR team figure out what pricing approach could make sense for a RIA. The team will work to develop a personalized pricing proposal that takes all of these points into account to ideally facilitate the RIA’s success, not hinder it.

The pricing proposal is not an end-all-be-all. If the advisor and their team feel an altered approach could work better for their firm, the TradePMR team wants to have that conversation. The team is committed to making sure the pricing structure can help advisors achieve their next stage of growth – so long as the agreement makes sense for both parties.

HEAR WHY ONE RIA LEFT A BIG-NAME CUSTODIAN FOR TRADEPMR

Considering a Transition? Get the Pricing Answers Your Firm Needs

Before you sign on with your next RIA custodian, make sure you know exactly what you’re in for. Dive into the nitty gritty on pricing with the prospective provider to better understand how their approach will impact your RIA.

At the end of the day, advisors need to pay their custodial service providers. The key is finding a pricing structure that will enable the RIA to succeed without it inhibiting their growth.

If you’d be interested in hearing how TradePMR could approach pricing with your firm, we should talk. We can dive into your firm’s needs and determine if TradePMR could be the right fit for your RIA.

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Written by TradePMR