Investment Planners’ leadership has a combined 50 plus years in the broker dealer and the RIA industries. Operating a traditional broker dealer (Investment Planners, Inc.) and Registered Investment Adviser (IPI Wealth Management, Inc.), the firm’s leaders understand what it takes to manage investments for individuals. This experience is invaluable in communicating and assisting the advisors whom they serve.
Over the past several years, traditional advisor business models have changed. Fewer and fewer clients are looking for traditional brokerage accounts. Many people are instead selecting a fee based investment platform. What are the differences between a traditional broker dealer account and a fee based account?
Traditional Broker Dealer AccountTypically, clients selecting a traditional brokerage account desire to be “hands on.” They want to make their own decisions, or at minimum, have their advisor call with a recommendation prior to placing any securities transaction. When action is taken, the client will pay a commission for that transaction. If no action is taken, no commissions are paid. Brokerage accounts may hold individual stocks, bonds, ETFs, CDs, and mutual funds. Investment Planners, Inc. is our broker dealer, and our trades are cleared through RBC Correspondent Services. All accounts are protected through SIPC and additional insurance coverage is provided by the clearing firm.
Registered Investment AdvisorIPI Wealth Management, Inc. (IPI) is the advisory side of Investment Planners, Inc. While this may seem confusing, it is an important distinction in how accounts are handled. IPI is a fee service platform. A client will open an account, or a household of accounts, and pay an annual fee based on the value of the assets. In this scenario, our clients typically elect to have discretion on their account/accounts, but that is not required. If the client selects discretion, the advisor will place securities in the account within the parameters selected and outlined in the Investment Policy Statement. IPI advisors have the option of having the custody of these accounts held at RBC, Schwab, or TD Ameritrade. Currently, we typically use the custody services of RBC.
RBCRBC Capital Markets, LLC is a clearing firm in Minneapolis, MN. This firm has the connections to the trading platforms utilized to buy or sell general securities. For example, if a client wanted to purchase 100 shares of Eli Lilly (stock symbol LLY) in a brokerage account, the client would speak with the advisor and the advisor would place the trade with RBC. The trade is reviewed by our home office, Investment Planners acting as the broker dealer. If an advisor wants to purchase 100 shares of LLY in an advisory account that has discretion, the advisor would place the trade through RBC, and IPI Wealth Management would review the purchase.
Find the Right Investment Platform for YouInvesting, like life, is complicated and there is no “one size fits all.” In our practice, we frequently have clients that have advisory fee based accounts for the majority of their assets while utilizing brokerage accounts that serve a specific purpose, such as college funding for a child or grandchild. The important item to consider is that we can assist you in making the right decisions for your specific needs.
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