At RIA in a Box, we believe that a registered investment adviser (RIA) firm can often benefit greatly by utilizing the services of a professional employer organization (PEO). Unfortunately, we presently see only a handful of RIA firms contracting with a PEO to provide a compelling benefits package to its staff members at often a much more affordable price than traditional small group business rates.
For those of you unfamiliar with the PEO model, a PEO can provide an outsourced, single-stop solution for payroll administration, benefits offerings, and general human resource services. A PEO can accomplish this for an investment advisory firm through a joint, or co-employment arrangement.We’ve observed that RIA firms that work with a PEO can often obtain a Fortune 500-type benefits package at a considerable discount to the normal, less attractive benefits package available directly to a small business like an RIA firm. PEO firms are able provide such a discount by pooling numerous small businesses together.
When starting or creating a new RIA firm, we find that many principals struggle with securing a compelling benefits package for themselves an their staff. For RIA firms with 5 or more total employees, a PEO solution may be worth considering. PEOs have become quite popular in the Silicon Valley start-up community but have yet to gain widespread adoption with independent RIA firms. There are a number of PEO firms available to RIA firms and a good listing of firms can be found on the National Association of Professional Employer Organizations (NAPEO) web site.
For more information on PEOs and other opportunities for RIA firms to better optimize systems and operations, we recommend that you download our free RIA Systems and Operational Best Practices White Paper.