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Navigating Independent RIA Setups with Michael Rasmussen · RIA Collective

• 0:17
  Charlie Van Derven: Thank you for tuning into another episode of RIA Collective. My name is Charlie Van Derven. I'm your host for the next 20 or 30 minutes or so. I've got a good guest today that I think brings a lot of value to our listening community. Of course, our initiative here at RIA Collective is to help those of you who maybe are in an environment or with a firm that no longer serves your needs to make that transition of independence. We want to give you knowledge, and more than that, I want to give you the confidence to let you know that a lot of people are doing that. And I am joined today by Michael Rasmussen. Michael's the founder of United Atlantic Legal Services. Now, he's based out of West Palm, but Michael provides services actually internationally, and he'll get into that more than I will.
• 0:59
  Charlie Van Derven: He's an awesome resource. For any of you who are looking at maybe your non competes and you're thinking about moving in an independent space, michael's here to provide services to help you get registered, make that transition even easier. Michael, thank you so much for being my guest today.
• 1:16
  Michael Rasmussen: Hey, Charlie, great to be here.
• 1:19
  Charlie Van Derven: Cool, man. I want to know listen, most people are listening to this, not watching it. Michael, for those who are watching it, this is my dad's house in the background in Green Bay, Wisconsin. I'm looking out the picture window. Snow has fallen, Michael and in getting to know you, one of the things that we connected on is you grew up, like, 60 miles from me in Waupaca.
• 1:39
  Michael Rasmussen: That's right, wisconsin.
• 1:41
  Charlie Van Derven: That's crazy. I got a fun story that I hope resonates with you. I hope it resonates with our listeners. So let's back up about 40 years. I'm a ten year old kid, right? In Waupaca. Are you aware of the Crystal River canoe trip?
• 1:57
  Michael Rasmussen: I am. Been there, done that. Yes.
• 1:59
  Charlie Van Derven: Oh, my gosh. So my dad's a big guy, right? He's 511, maybe six foot, but most of his life he's about a 200 and 8290 pound guy. Right. So for Father's Day one year, my mom decides we're going on the Crystal River canoe Trip. My sister's 13, I'm ten. My brother's seven. We're dragging my dad out to rent these little fiberglass canoes. And if there's anything I remember about the Crystal River canoe trip, it's actually pretty shallow, isn't it?
• 2:27
  Michael Rasmussen: Oh, taking it down to, you're just right there on the dirt. Yeah.
• 2:31
  Charlie Van Derven: So my dad, at 270, 280 pounds. Michael dragged his butt for 3 hours. It's probably an hour and a half trip, but it took him 3 hours. So we have affectionately, for the last 40 years, since that moment, have affectionately referred to the Crystal River canoe Trip as the Crystal River ball buster.
• 2:53
  Michael Rasmussen: Yeah. One of those things. Glad to have it in the rearview mirror. Not to do again. And maybe let the kids do that one for yeah, no doubt.
• 3:02
  Charlie Van Derven: But it's one of those, know, every family's got fun stories that everybody rallies around. That's one of our fun family stories is I am excited to have you. Yeah.
• 3:12
  Michael Rasmussen: Oh, thanks. No. Waupaca, Wisconsin. The whole thing. Great place to be. But like you just said, you got your snow stacking up out front, and I'm happy to be down in my South Florida sunshine right now.
• 3:22
  Charlie Van Derven: I'll be here for about three weeks working with some family stuff, and I think it's 80 at my house today in Florida. It is like 17 here, and we're expecting twelve or 14 inches tonight. Yeah, I could think of better places to be.
• 3:37
  Michael Rasmussen: Yeah.
• 3:39
  Charlie Van Derven: Cool. Michael. Well, listen, I don't want to keep our listeners too long. I don't want to keep you too long. So I want to get into the services you provide because most of the people that we interview are leadership at RIAs. Right. And they can talk about the nuts and bolts and transitioning clients and things like that, but you provide a service that really makes this all possible. Right now. You're based out of West Palm, I mentioned, but, I mean, you guys provide services for international advisors moving into the US. Why don't you I'll quiet up a little bit and let you explain what your business is. Go ahead, man.
• 4:19
  Michael Rasmussen: Sure. So just a real quick background on me is I come out of that chief compliance officer, general counsel role for several different investment advisors. Different sizes, different shapes, retail firms, hedge fund firms, hedge funds managers, all different sorts of things. I decided to launch this law firm in 2020. Really what the goal was is to really focus on that launch process. So investment advisors that want to go independent, they take what the steps are to get that up and running. And then we work quite a bit with firms based in the United Kingdom, because I'm a licensed attorney over there as well as here in the United States. So that's kind of our little niche and what we're focused on.
• 5:02
  Charlie Van Derven: And now I noticed in your background, actually has some time with FINRA as.
• 5:06
  Michael Rasmussen: Oh, yeah. Started off as a regulator, got out pretty much as soon as possible. But I will say that experience gave me some appreciation for what they're trying to do and get an understanding of what their goals are when they're coming in and taking a look at some of our clients. For sure.
• 5:24
  Charlie Van Derven: After years in those roles at other firms, what prompted you to start your own?
• 5:29
  Michael Rasmussen: Yeah, so, like a lot of the clients that I work with, it's that independence factor. It's the building your own business and really making kind of your vision come true and making a legacy for yourself and for some other people and try to do a little bit better. Yeah.
• 5:45
  Charlie Van Derven: That's awesome. I'll tell you what I shared too, right, with Social Advisors who started in 2013 after maybe 15 years of working with other firms in similar roles. I thought I could do it a little bit better and to your point, really paving my own path instead of being relying on someone else. I appreciate that, man. I think we're all of very much the same spirit. Our listeners, the people I've interviewed prior to you so awesome to have you as a guest. Let's answer some of the basics, right, because most of our listeners, Michael, are, you know, folks that maybe they graduated college, went to the job fair, got the job with, thought, you know, super excited about making that happen.
• 6:26
  Charlie Van Derven: And then they're in an environment where, and I don't mean to point Morgan Stanley out in this, right, that's just an example of a firm, but perhaps quotas initiatives, cross selling, maybe none of these things really feel good anymore. Maybe they can't serve their clients in the purest way and they're ready thinking about making that move. That's why they're listening. So let's start with some of the basics. So if an advisor is ready to make the move, what does the registration process look like and how do you and the team at United Atlantic make that happen?
• 6:59
  Michael Rasmussen: Yeah, we try to make this as simple as possible, but I'm going to go through a few steps here. But the biggest thing and the biggest issue we run to is we have advisors that are coming out. They think that what they're going to build is going to look a lot like where they're leaving. And you actually had a previous guest, Corey Copper on previously and I think he talked quite a bit about understanding what you're running from and what you're running to. More importantly. And when we sit down and talk to our clients, we want to make sure that they understand their business plan and that's really step one. We've had advisors push back their launch deadline. We've had advisors that have restructured their entire thought process when they've sat down with us and gone through the actual business plan.
• 7:45
  Michael Rasmussen: I know it sounds like a fairly fundamental thing, but I actually have yet today to have an advisor come to me with a robust business plan coming out. What they actually want to create, they have some ideas and most of them come from that sales side and the portfolio management side of things. Maybe they don't have a full grasp of what the entire independent RIA looks like. Operations, compliance, all the different moving parts that you have to be dealing with. So that's really the first thing we look at. We also work with the entity formation side of things. So what's the actual legal entity that's going to act as the advisor? What do the operating agreement look like that becomes more and more important when you're coming out with teams that are leaving these firms and trying to launch their own thing.
• 8:28
  Michael Rasmussen: What are the rights and responsibilities? What happens if there's a material disagreement about something? What happens if people want to bring in a new partner, for example? Have they even thought through these issues? And we spend a lot of time talking about these sorts of things. And then from a compliance kind of perspective, we help draft those initial disclosure documents which outlines to your clients and the regulators what the business activities of your firm is going to be. And again, that really ties back into that having a robust, well thought out business plan, because a lot of the information is reflected in those disclosures that should be in your business plan as well. So we focus on doing that. We put together your client agreements, that sort of thing, work with the SEC through the registration application process.
• 9:14
  Michael Rasmussen: So we're right there holding your hand when you're submitting those documents to the SEC. And then finally we'll finish it up and we'll touch it up with a nice, robust compliance program. But that is another piece that we go back and take a look at your business plan and make sure that what we're actually saying in that compliance program documentation lines up with what you're doing in real life.
• 9:34
  Charlie Van Derven: That's awesome. I had a conversation with a woman earlier this week who will be a future guest, Pamela Sams, and she had come out of Ameriprise to go independent and went through their P Two program. And so she made the transition there. She echoes a lot of what you said, right? So merit prize is great because they give you the roadmap, right here's how you do it. Now, certainly you're pigeonholed on products and cross selling and things along those lines. So all the same reasons that everybody else leaves. But the biggest fear for her when she made her jump was not having that roadmap. Right now you've got this global, open world of things that you can do, and she said that was her biggest struggle, right?
• 10:24
  Charlie Van Derven: So what an amazing resource you are to kind of put that roadmap together for advisors in the business plan.
• 10:34
  Michael Rasmussen: Nine times out of ten, it's advisors that think that world is all the options out there. That's everything that they want to be doing, and they're going to chase down every single thing. The ones that we see succeed every time are the ones that are focused. They know who they're going after. They know how they're going after them. They know very specifically what services they're going to be offering them. We sit down with clients. We'll ask simple questions like, what type of client are you going after? And they'll say, well, we're going to go after high net worth clients we just want to deal with. So no institutional clients? Well, yeah, maybe some institutional clients. All right, so no retail clients. Go for sure. Well, we maybe we'll have some foundations. Yeah, I never thought about that.
• 11:18
  Michael Rasmussen: But, yeah, we'll go after and it just spirals into this thing. You'll take anybody, right? You're going to go after anybody. So how are you going to service all these people? And what's the program look like? How does that all fit together? And again, I don't mean to beat up this business plan idea, but sitting down and thinking about what you want to service and then how you're going to service them. Somebody coming out of a big firm has never had to worry about things like cybersecurity before. That's all taken care of for them. And they need to go out, talk to different vendors and see who's going to help them fill that gap, because I've yet to meet the financial advisor that can put together a robust cybersecurity plan and program to protect their firm.
• 12:03
  Michael Rasmussen: And regulators are looking at these sorts of things, and it's important that those conversations start extremely well before you're starting to the actual registration application process. Once that gets going, time flies and you're going to be up and running without knowing which direction you're you know.
• 12:22
  Charlie Van Derven: Most advisors I talk to are worried about the percentage of assets they're going to protect in that move. Right. You're opening their eyes to so many things that they're not even considering. Michael, what an awesome resource. But tell me, when you're helping an advisor with registration transition process, do you have specific goals?
• 12:40
  Michael Rasmussen: Yeah, so we always define our projects. We try to keep things incredibly efficient. And this goes back to that initial conversation where we talk about, again, what are the goals of the firm? And really we focus on that first six months, actually, from the date of launch, six months out, what are the goals of the firm? Most of them are, like you had mentioned, focused on bringing over their clients that they currently are working with, getting that set up, that's great. But you also need to set up the entire base package of what program are you going to use for portfolio management? What's your CRM system look like? Who are you going to use for your outside consulting firm, if that's an option? Do you have a legal firm in place? Who's putting together your client agreements? All of these different things.
• 13:26
  Michael Rasmussen: We need to sit down. We need to get on the same page about these things. That helps with that efficiency thing. The transparency piece is another concept that we continuously go back to throughout our conversations. And this goes to both us being transparent with our clients and saying, you're not ready to submit an application with the SEC. You don't know which direction, again, where you're headed and what you want to do. Put a pause on this. Think about what you're doing. This can be something like as simple as are you even properly registered to be an investment advisor out there? Do you have the FINRA licenses that you need to have.
• 14:01
  Michael Rasmussen: So conversations, and a lot of these conversations are not things that our clients necessarily want to hear, but you much rather have them now before you're set up and have the SEC looking over your shoulder. Then the last piece of this is that we really focused on tailored solutions, which for means that what you're trying to build is what we're supporting. It's not a cookie cutter solution. Right. You can't do everything off of what a baseline firm looks like. It's not going to look like what you were anticipating, what you want to build, and it only leads to problems down the road. So we really focus on, again, getting to know these clients and what their goals are, making sure that their entire legal compliance structure is adequate. It makes sense for them.
• 14:48
  Charlie Van Derven: My gosh, our listeners out there who are actually thinking about making this move and are maybe 6,12,18 months away from making this move, listen to the things that Michael say, and these are things you're not even thinking about.
• 15:01
  Michael Rasmussen: Right.
• 15:01
  Charlie Van Derven: Again, it doesn't look like the broker dealer you're currently at. It doesn't look like what you're currently doing. I mean, there's a lot to think about when you make the transition. Michael, along those lines, are there any common challenges that you see advisors face that people should be thinking about? You're very proactive in your approach with the conversation, but is there anything that you see repeatedly that advisors are challenged with?
• 15:26
  Michael Rasmussen: I think advisors come out believing that they understand the business from beginning to end, and I would suggest that most of them need support in different channels, and that includes your operations team. You got to put together. You got to be thinking about that. Again, the legal compliance side of things, what does your marketing look like coming out? Who's going to be responsible for all of these things? And advisors, especially when they come out by themselves, tend to take on way too much for themselves and they're not looking to either outsource it or bring in somebody else. And we oftentimes open people's eyes to just how much work all those other people that were taking a little slice of what they were getting before at the big firm.
• 16:09
  Michael Rasmussen: Now, all of a sudden, you're going to have to be paying these people directly and bring them into the conversation. Very early on, when you're building that business plan, you sit down and you talk with your marketing firm. If you're going to be outsourcing marketing, for example, and talk to them, this is who we want to go after and this is what it looks like. We have firms that launch and they don't even have logos in place and basic stuff like that. They're scrambling to get a website up. Their clients that they're trying to bring over are going to websites that are, say, under development. Right. And that's terrible. You can't have a look like that. You don't look professional. So we really try to get everybody on the same page and partner with things that most advisors don't even partner with.
• 16:52
  Michael Rasmussen: Firms and other people that most advisors don't even kind of consider us as an attorney or law firm working with. We tried to bring that entire team together and work with different people so everybody's on the same page and marching in the same direction during that launch process. So day one, when you're calling that client, your website looks great. Your marketing not only looks good, but it's also compliance approved, and there's not going to be any SEC issues.
• 17:20
  Charlie Van Derven: Right.
• 17:20
  Michael Rasmussen: For example, that you're going after. Your disclosure documents are actually in alignment with what you're going to be doing, and you're not going to have to be making amendments with that. A month, two months, three months later, people know which direction they're heading. Your operations team is ready for that initial client onboarding, which I don't know how many firms we work with where, yeah, here comes a client. The client's ready to sign the paperwork, and everybody's like the paperwork, what's the paperwork and where is it? And who is responsible for the paperwork? And they're chasing that down. Right. So it needs to be biggest failures. And I think the most often we see clients not coming over is when they run into these kinds of issues where advisor calls them up, says, hey, I left. I want you to come over.
• 18:06
  Michael Rasmussen: I want you to come join us. And they're like, well, where's the website? What's the team look like? And there's a lot of UMS, and ha's and we're getting there, and that sort of thing. And then they say, well, call us back in three months when you're up. It's too late.
• 18:21
  Charlie Van Derven: Yeah, it absolutely kills confidence. Right. I'm sure you had a great relationship with the previous firm and they want to go with you, but they kick the tires on to your point. All those marketing assets at the simplest form, and if that's not in place, yeah, that'll kill confidence. What I love about your story about your message is you play in the advisor's life for that transition. Very much the role that they play, depending on their clients, of course. But if it's a retail, family office type advisor, you play that same kind of quarterback role with all these resources at launch. So that's something that they can identify with resonates, I'm sure.
• 19:04
  Michael Rasmussen: Yeah. One of the biggest gripes I had in a previous life when I was working as a consultant, compliance consultant, the focus was on getting the compliance stuff done, let them worry about the rest of the ecosystem and how that looks. That wasn't good enough for me, and it didn't make sense. And the kind of guy that asks, why are we doing this? What's the connection here? Probably to the annoyance of some people, but I like to see that big picture and how everything interacts with the other pieces of the puzzle. And I wasn't getting that at the standard compliance consulting firm. So here we talk much more robustly, big picture. How does this all work together and do we have everything in line that we need?
• 19:51
  Charlie Van Derven: That's awesome, man. I like if you've got it available client story, right? Maybe a problem you solve for a client, something that our listening audience will be able to identify with.
• 20:04
  Michael Rasmussen: Yeah. So I think when you sit down and you sit with that business plan and the disclosure documents really understand what the disclosure document is all about, right? That document is a document that goes to your clients, explains the business of your firm, and it goes to the SEC and obviously explains the same thing to them. What you want is for that document to accurately reflect the business of your firm. So we use, like I had mentioned, most of our clients come to us without that business plan. But really, if you look at the template of the questions that are being asked in those disclosure documents, which are required anyways, it is a business plan and it goes through, again, the types of clients, the types of services, who the third parties that you're going to be working with, and that sort of thing.
• 20:50
  Michael Rasmussen: So I think that we are in a unique and interesting position where we can really help build that business plan. So even if you're not looking to launch in the next month, three months, whatever it is, it's a year out. You can still sit down with us or anybody that provides these type of service, walk through what information you need to be providing your clients anyways as a fiduciary or to the regulators, as required by the disclosure requirements, and sit down and understand what they're going to be looking at, what clients want to see. And are you able to answer those questions? And how do we put this all together? We just got done working with a client that launched way back in August.
• 21:31
  Michael Rasmussen: They were one of these firms that was, yeah, we'll go after any type of client, we'll go after any type of service. We'll provide it all, we'll do it all, we're all things to all people. And that's part of the problem coming out of these big firms is maybe you can be all things to all people because there's the different channels that those big firms answer. But once you get your small advisor, you have a small team, need to stay focused. And we're working with a client, like I mentioned, that launched back in August, and we're still working through exactly what that firm wants to be. And it's a struggle. They've lost clients over it. They also see conflicting marketing. We work with this type of client. We also work with this type client.
• 22:11
  Michael Rasmussen: And honestly, clients want to know that they're going to a firm that specializes and focuses on what they do and what their goals are.
• 22:20
  Charlie Van Derven: We've been trained as consumers to seek that in professionals. And you don't have to look any further than the medical industry. There are very few general practitioners out there. You still got your family physician, but there are very few general practitioners out there anymore. And I'll share that. On the marketing side of what I do. In the business development side, for almost 25 years I've been asking the question of who do you work with? And the most common answers are anyone with money. And if you can fog a mirror, right? So we struggle with it from a marketing and it's really hard to convey messaging. It's really hard to market unless you know who you serve and what the value you provide for those people are.
• 23:04
  Michael Rasmussen: And honestly, the days of where you can just say, I'm going to drop five basis points off of whatever it is to have clients come over without more to that, they can go anywhere and the client can stay where they are, negotiate their fee. They want to see, like you said, the value. Why is it that you're special and a good fit for that particular client? That's what they want to see.
• 23:28
  Charlie Van Derven: I think this is last year's FINRA number 612,000 and some change registered reps in the country. There are like an additional 65 or 70,000 IARs. That's almost 700,000 advisors, all going after pre retirees, half a million dollars invested assets. Not all that's a gross generalization, but yeah, get narrow, man. That's how you start. Get rid of the competition. Your messaging resonates, so you take it from a different perspective. But we're having the same conversation with advisors, all the so Michael, you're awesome, man. You're such a good resource. Are there any questions that I haven't asked you that I should be?
• 24:09
  Michael Rasmussen: I think that there's nothing terribly specific, but I just would like to put this out there that if you're considering going down this avenue, contact a law firm like mine or Corey I'd mentioned earlier, go watch that video that you had put together with him and really think through what that business plan looks like. Talk to us, see if we have ways of poking holes in it. Right? We're going to ask you what we see in the industry. We see dozens of these a year, hundreds of these a year. We go through this registration process all of the time. We put together these documents and we can go through and say, well, we see firms succeed here, we see firms fail here. Have you thought about these different issues? And this is way before you even think about submitting that registration application.
• 24:58
  Michael Rasmussen: So get your game plan in order early and talk to people who know what they're talking about.
• 25:06
  Charlie Van Derven: Michael, if we've got listeners that want to reach out, have some additional questions for you, what's the best way to reach you.
• 25:12
  Michael Rasmussen: Yeah, you can find us at the website unitedatlanticls.com. A lot of good information on there. We provide some white papers on this registration process, so get some materials and information there. Obviously reach out, contact us. We're happy to talk. There's a lot of us in this industry that are compliance legal nerds, and I'm unabashedly one of those. So if you want to talk, I'm happy to talk. You know what's really exciting, though, is you love hearing people's business plans. I like the idea of helping people create these things and they get really excited about them and that energy actually feed off of that. That's exciting for me, too, to watch people build their dreams and chase down what they're going after. So happy to talk. People should always be reaching out.
• 26:03
  Charlie Van Derven: That's awesome, man. I got one last question for you. A fellow Wisconsin guy. Do you own a yellow cheesehead?
• 26:11
  Michael Rasmussen: No.
• 26:12
  Charlie Van Derven: I don't either.
• 26:12
  Michael Rasmussen: Yeah, I gave up my cheese hat when I moved to Florida. It would melt.
• 26:20
  Charlie Van Derven: How cliche is this, right? My brother actually runs it for Sartori Cheese in Plymouth, Wisconsin. Cheese is in the blood.
• 26:30
  Michael Rasmussen: Fantastic.
• 26:31
  Charlie Van Derven: Yeah. Michael Rasmussen at United Atlantic Legal Services. Thank you so much for being here. You are such a great resource for not only our listeners, but our industry. I'm excited to refer people to you because I talk to advisors all the time that are ready to make a leap, right? So if you don't hear from listeners because of the podcast recording, you're certainly going to hear from them from me, just passing them your way over the coming months and years. So, Michael, thank you so much for joining me today on RIA Collective.