Stuck in Neutral? Founding Partner and Head of Business Development Robert Tamarkin shares key strategies to drive organic growth in today’s rapidly evolving financial landscape.
In today’s financial landscape, independent registered investment advisors (RIAs) hold a distinct advantage due to their agility. By embracing specific strategies, advisors in the world of independence can drive substantial growth.
At the core of the RIA model is the client, so of course any growth strategy must prioritize client needs. This approach benefits both clients and the advisory teams serving them. Taking this into account, here are a few strategies that can help RIAs effectively drive growth and expand their footprint in today’s dynamic environment.
In 2024, Digital Marketing is a MUST
Sometimes, the simplest strategies can yield the most significant results, particularly for RIAs focusing on digital marketing. Yet, a recent study indicates many financial advisory firms allocate less than 1-2% of their revenue to marketing. Despite its growing importance, many advisors still rely on word-of-mouth in this area. Hiring a digital marketing specialist can be a game changer for these firms, while inaction only guarantees missed opportunities.
A recent survey from Broadridge indicates that advisors are struggling more than ever with marketing due to limited time and expertise. Yet, many are finding success by adopting a personalized content approach and leveraging next-generation technologies like AI to engage their prospective and current clients.
The survey also found that 70% of U.S. advisors with a defined marketing strategy saw an increase in inbound requests in the past year, compared to just 44% of those without one. The translation here is this: Hiring a digital marketing specialist or allocating a budget for digital marketing efforts is one of the fastest ways for advisors to scale. Even the smallest strategic moves can translate into significant business growth.
Invest in Your People
In today’s diverse wealth management landscape, clients span generations—from Gen Z to Baby Boomers and everyone in between and beyond. Advisory teams should reflect this breadth of experience and perspective. Investing in talent isn’t just about filling positions; it’s about strategically cultivating a team that can connect with and understand the unique needs of each client segment.
To achieve this, RIAs should prioritize a balanced mix of seasoned professionals and emerging talent. Experienced advisors bring invaluable insights and industry wisdom, while next-gen professionals infuse fresh ideas and a tech-savvy approach to client engagement. This combination not only enhances client relationships but also positions a firm for long-term success.
Recruiting a diverse team also fosters innovation and adaptability. The financial landscape is evolving rapidly, and a workforce that combines traditional expertise with modern perspectives is better equipped to navigate these changes. Firms should also consider implementing mentorship programs that pair experienced advisors with newer team members. This collaboration can facilitate knowledge transfer, bolster confidence, and create a culture of continuous learning.
Don’t Underestimate the Power of Configurable Technology & Integrations
Unlike the wirehouse model, independence allows for adoption of agile technology, which advisors should prioritize. This flexibility enables RIAs to integrate solutions rapidly, enhancing efficiency and scalability. A recent survey from Fidelity shows that firms embracing technology-related best practices report higher-than-average efficiency, stronger growth, better client experiences, and increased advisor satisfaction.
According to the survey, tech-forward firms experienced a client growth rate of 20% compared to 8% for others and double the average assets under management growth rate (22% versus 11%). Additionally, advisors at “digitally empowered” firms reported higher career satisfaction (81% versus 59%), greater firm satisfaction (64% versus 44%), and higher average compensation ($489,000 versus $373,000).
Build Strategic Partnerships
In today’s complex financial landscape, building strategic partnerships can enhance service offerings and remove barriers to growth. By collaborating with specialists—such as CPAs, estate attorneys, and other professionals—RIAs can provide a more comprehensive suite of services, addressing their clients’ multifaceted needs.
Clients increasingly desire a “family office” experience, where all their financial needs are managed under one roof. However, not every advisory firm has the in-house expertise to meet these diverse demands. This is where strategic partnerships come into play. By creating a robust network of specialists, RIAs can offer clients seamless access to tax planning, legal advice, estate planning, and more—all while ensuring they receive top-tier service.
Collaborating with experts in different fields also fosters a referral network that can lead to new client opportunities. For example, a CPA may refer clients to an RIA for investment management, while the RIA can direct clients to the CPA for tax-related matters. This reciprocal relationship strengthens both businesses and enhances the overall value provided to clients.
Remember: Agility Is Your Superpower
Independence often goes hand-in-hand with an entrepreneurial spirit. This freedom allows advisors to make swift decisions that benefit clients and adapt quickly to market changes. Advisors should leverage this agility in time-sensitive environments, as competitors with different models may struggle to keep pace.
By embracing these strategies, independent advisors can grow their practices while providing exceptional value to clients, which remains at the center of the wealth management universe.
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