Here’s How a Market Drop Could Punish RIA Owners—and What to Do About It

Owners of RIAs face a triple-threat risk when it comes to steep market corrections. Their clients would likely lose money, the values of their own portfolios would probably fall, and their firms’ enterprise values would take a hit. In this episode of “The Deep Dive,” host Jay Hummel talks with Scot Billington about the risk and how to hedge it.

Scot suggests that RIA owners consider reducing their exposure to the S&P 500, as well as using options for protection, despite the high cost. The discussion also explores how financial advisors can guide clients through managing risk, particularly during times of market volatility.

Scot Billington: Scot co-founded Covenant Capital Management, a registered commodity trading advisor, in 1999.  Previously, Scot worked as a commercial hedge commodity broker and was a market maker on the Chicago Board Options Exchange floor.