Never has it been more imperative for RIAs and wealth management firms to internalise that yesterday’s growth strategy is not tomorrow’s growth strategy.
A changing market, shifting consumer needs, and an increasingly digital financial services landscape all impact how RIAs do business, for better or worse. Firms that want to grow need to keep up with these shifts or risk falling behind.
Of course, growth is not success in and of itself. Growth is an indicator of success, both for clients and the firm. However, as your success is inseparable from your clients, continued growth is a financial — even moral — imperative for firms. It can take shape as growing your book of business or growing your internal staff.
If growth in 2023 is your firm’s goal, continue reading as we break down three of the leading challenges RIAs face today and tips for overcoming them.
Without a “why”, growth becomes difficult
First and foremost, growth is only possible with the right team and people behind your business. Take those away, and you will be hard-pressed to achieve much. Unfortunately, beyond the bear market or even a looming recession, one of the biggest obstacles facing RIA firms today is exactly that: retention and recruiting.
Indeed, many firms report that while an open position in the past may have had as many as 60 applicants, today, they’re hard-pressed to have even three applicants for a role. Not to mention paying above-market salaries for highly competitive roles, which can increase business expenses over time.
Kevin Beard of Atria Wealth Solutions offers this advice: “Make 2023 the year of connections and connectivity for your clients and employees. The best asset you can exercise is finding your passion for your business and sharing that passion with those around you. Consider revamping your branding, value statement, or benefits. Oftentimes, this will contribute to more applicants in line with your vision.”
“If you’re not growing, you’ve fallen into a rut where you’ve lost the passion you have for your business,” Beard said. “Part of growth is staying ahead of the competition, but also not losing your passion.”
Firms that want to grow must learn how to attract and retain employees. Beyond salaries and open positions, candidates will be drawn to firms that differentiate themselves with an attractive virtual/physical office environment, great compensation and benefits, increased flexibility, and a healthy work/life balance. And do not forget, opportunities for advancement.
No specific strategy means no specific results
The most important component of a growth strategy is to have one. Jeff Vivacqua, Cambridge Investment Research Inc.’s President of Growth and Development, puts it this way: "A growth plan you can think of in five minutes probably isn’t a very good plan."
The answer to real growth isn’t generic statements like “more marketing,” “more retention,” or “more clients!” Rather, true growth requires drawing up a strategy you can measure with specific improvement metrics.
There are three main growth areas for advisement firms:
- Recruiting
- Organic growth
- Acquisitions
All of these will work to improve your firm’s growth, but it can be difficult to direct your efforts unless you know which specific area you want to focus on. Vivacqua recommends this four-step process to decide what growth strategy is right for your firm:
- What is my growth plan now?
- How do I want to grow in the future?
- What are the right activities I need to implement to get it done?
- What are the right metrics to measure success by?
Once you know the answer to those questions, you can decide which growth strategy makes sense for your business, goals, and budget. After all, RIAs can only do so much. Figuring out where to spend your time and money for the most efficient marketing dollar is the secret to continued growth, no matter the climate.
Without the right processes, tech will not help
Finally, growth cannot be achieved just by adding a new technology tool to improve efficiency for the back office and clients. Rather, as more firms become digitised, a key differentiator for firms will be the quality of their technical processes and personal touches with clients.
As your firm becomes more adept at technology, adoption and effective execution means building methodical processes for implementation, usage, and application by clients and employees. It’s not enough to have enabling tech to grow; you need to have processes that will make the tech work for your organisation, your people, and your clients.
In addition to improving tech processes, applying elements of personal service is becoming more of a competitive advantage for smaller firms. While efficiency was a focus of many firms in the past, effectiveness is becoming more important for clients and firms.
At Docupace, we believe that your technology should enable the balance between personal touches and efficiency, not create more headaches and problems. Our new RIA productivity suite includes capabilities specifically designed to meet RIA needs. Learn more here.
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