One of the financial services models that has gained the most traction in the past decade is the hybrid RIA model. With this model, financial advisors can provide clients not only with brokerage products and services as a registered representative of a broker-dealer, but also investment advisory services as an investment adviser representative of an investment adviser (so-called dual-registered representatives). With a broader universe of brokerage and advisory services and products than is typically available through a standalone brokerage or advisory firm, dual-registered representatives can better tailor their advice to clients and simultaneously expand the universe of potential clients they can serve when operating through a hybrid RIA.

Nonetheless, the hybrid RIA model is often misunderstood. This is due, in some part, to the fact that the hybrid RIA is not a single uniform business model, but rather, multiple variations on the same model. Each type of hybrid RIA has its own unique opportunities and challenges, and this white paper will delve into the factors that make each of these variations unique. It will also explain some of the unique compliance risks associated with operating under the hybrid RIA model.