Schenkelberg Investments, LLC, is set up as an Independent Registered Investment Advisor (RIA). There are many ways investment and financial advisory services can be offered. Clients can work with financial advisors at banks like Wells Fargo, brokerage firms like Merrill Lynch, insurance companies like Northwestern Mutual, or independent registered investment advisors. Different structures can be a little confusing and often clients are more concerned with the person with whom they are directly working and do not think too much about how the advisor is offering services.
Financial advisors will often choose to work at a bank, brokerage or insurance company for the support these structures can provide the advisor. These businesses could be a good source of client referrals for a new advisor. They also provide compliance, technology, research, marketing and overhead support. A few drawbacks with these firms may be that advisors are locked into products and services offered by these firms, and the larger companies may require a large chunk of earnings for the support they provide.
When I was embarking on a client advisory practice, I explored all of these options. In the end, I chose to set up an Independent RIA because I wanted to offer clients the products and services that I believe give them the best quality and cost efficiency without being tied to proprietary products. Having provided investment research and management for many of these firms in my career, I did not require the investment support that many advisors need. The independent structure also affords me more control of work/life balance.
Schenkelberg Investments, LLC, is overseen by the Nebraska Department of Banking and Finance. This entity conducts audits on a regular basis to ensure that Independent RIA firms are operating in the best interest of clients (fiduciary standard) and adhering to all pertaining laws. Independent RIAs are required to operate under the fiduciary standard, whereas brokerage firms and insurance companies are not necessarily required to adhere to this standard. Additionally, in order to keep my Chartered Financial Advisor (CFA) designation, I must operate as a fiduciary. Once the firm’s assets surpass $100 million, oversight will move from the state to the Securities and Exchange Commission (SEC).
There is a little more work to handle compliance and other overhead functions; however, having found key partner companies, we have built a comprehensive practice. As an independent RIA we not only have freedom of choice for products and service; we also have freedom of choice to choose partners that are the best fit. The chart below illustrates how the firm works with partners to operate a comprehensive business. In addition to the operational partners below, we have partnered with professionals that we believe offer quality services for Estate Planning, Accounting and Insurance.
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