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Navigating the Future of RIA Success with Top Strategies and Trends

BY Rosa Atkinson

Whether you’re a seasoned advisor or just stepping into the workforce, understanding the ever-shifting dynamics of RIAs is key to staying ahead.  There is an increasing number of professionals who are drawn to the prospect of independence within the RIA space. In an industry traditionally characterized by established structures, the prospect of independence offers a sense of autonomy and entrepreneurial spirit that resonates with both seasoned advisors and emerging talents.

It’s not just about challenges and opportunities; it’s about redefining the approach for what lies ahead in the RIA space. As professionals navigate their roles within this shifting landscape, it’s crucial to consider the multifaceted aspects of running an RIA. This includes embracing intergenerational planning, exploring innovative technologies and staying attuned to emerging trends.

State of the Advisory Field

Let’s talk about what’s happening in the world of financial advising—it’s pretty exciting stuff! Right now, there’s this big buzz around the RIA model, and for good reason. It’s like the cool kid on the block, the fastest-growing segment in the industry. Just last year, there were a whopping 15,114 SEC-registered investment advisory firms, and 366,943 investment advisor reps, and there were a mind-boggling $114 trillion in assets under management. That’s no small change, right?

More and more firms are breaking away from the traditional molds, opting for the freedom and flexibility that comes with the independent RIA model. This trend isn’t just a coincidence; it’s a deliberate choice made by firms seeking to redefine how they serve their clients. The allure of independence lies in the ability to cater to individual client needs on a deeper level, unencumbered by the restrictions often found in larger, more rigid structures.

So, what’s driving this shift? Well, on the client side, things are changing. It used to be all about the numbers, but now, trust isn’t just about the financial figures. Clients want more. They’re after a real relationship with their advisors, someone who gets them and understands their needs. They want advisors who act as fiduciaries and take a holistic approach to their financial lives. People are getting savvier, and more educated about what they need from their advisors, and it’s not just about dollars and cents anymore — it’s about empathy and understanding. For advisors, this shift brings a ton of opportunities. There’s this whole new level of independence that’s incredibly appealing. More and more advisors are breaking away from the traditional models, eager to focus on what they do best. They’re finding niches and becoming specialists in their fields. It’s not just about growing in size; it’s about growing in expertise and providing that personalized touch that clients crave.

7 Key Strategies for Advisory Growth

When it comes to growing your advisory practice, it’s not just about chasing numbers. It starts from within, and understanding your ‘why’ is key. Building the engine for growth requires introspection. Begin by considering your purpose and values. What drives your practice? What are your core beliefs? Your ‘why’ should be the guiding light.

  1. Internal Focus: Start from Within – Think about your team structure. Your team is the backbone of your success. Invest in the right people who share your vision and values. A strong team is instrumental in delivering an exceptional client experience.
  2. Empowering Your Team for Growth- Many RIAs encounter a common challenge—an apparent glass ceiling on assets under management (AUM). They work tirelessly to reach their AUM goals but can’t seem to break through. A common mistake in this scenario is placing decision-making power in the hands of too few people. To break through, spread the responsibility. Build a great team that can collectively drive your practice forward.
  3. Segmentation is Key – When it comes to serving your clients, a one-size-fits-all approach is a mistake to avoid. You need to build value in your relationships by understanding your clients’ unique needs. Segmentation is the way to go. The clearer you are on this, the more specific and tailored you can be in delivering value.
  4. Effective Marketing and Communication – Marketing and communication are often underestimated. Identify your target audience, both internally and externally. Internal marketing, which focuses on your existing clients, is as vital as external marketing. Consistency in your approach is crucial. It’s not just about what you say; it’s how you say it.
  5. Sales and Prospecting: Managing the Pipeline – Managing your pipeline is a vital part of the process. This means keeping a clear record of your contacts from the very first interaction. It’s about tracking leads, potential clients, and current clients at different stages of engagement. This not only helps you keep a handle on your business development but also ensures that no opportunity slips through the cracks.
  6. Partnering and Referring – This is an area where the industry often falls short. Building alliances and leveraging referrals can significantly boost your advisory practice’s growth potential. It’s all about creating a network of trusted partners who share your values and vision. To excel, establish a strong value proposition, and maintain a robust pipeline management process. During the process, treat clients as prospects and valued clients alike. This approach reinforces the idea that every client, whether acquired through referrals or other means, is equally important. It’s about delivering consistent, high-quality service to all.
  7. Technology: Choose Wisely – When it comes to technology, the temptation is often to go all-in upfront. However, this can be both risky and expensive. Instead, choose your technology solutions carefully and in stages. Technology should empower you, not work against you. It’s a tool to enhance your practice, not hinder it.

Trends to Watch Out For

As the landscape of the RIA industry continues to evolve, it’s crucial to keep an eye on emerging trends that are shaping the way advisors operate and serve their clients. Here are some key trends to watch:

1. Client Expectations: A Holistic Approach

Client expectations are evolving, and they’re increasingly looking for more than just financial advice. They want a holistic approach to their financial well-being. This means that as an RIA, you need to go beyond traditional investment planning. It’s about addressing broader financial aspects like estate planning, tax efficiency, retirement goals and even non-financial concerns. Clients are seeking advisors who can provide a comprehensive view of their financial lives and help them achieve their broader life goals.

2. Advising on Family Businesses and Dynamics Providing Value Amidst the Intergenerational Wealth Transfers

Advisors today are grappling with a critical challenge posed by the complexitiesof generational wealth transfers. Surprisingly, despite family-owned businesses contributing to over 50% of America’s GDP, a majority of wealth transitions occur without advisor involvement. To truly elevate client value, there’s an urgent need for strategic focus. Prioritizing guidance on asset transfers within family businesses — through intergenerational planning and exit training — proves essential. Furthermore, amidst industry-wide innovation, advisors find themselves uniquely positioned to harness these advancements for client retention and growth. It’s about seizing this momentum to deliver the tailored support necessary during these significant wealth transitions.

3. Tax Services and Planning

One of the top services gaining prominence in the RIA industry is tax services and planning. Tax optimization has always been important, but with evolving tax laws and an increased focus on tax-efficient strategies, it’s taking center stage. 

As you navigate the shifting landscape, consider how these trends may impact your practice and the value you provide to clients. By anticipating and adapting to these changes, you’ll be well-positioned to offer holistic guidance, address intricate family dynamics, and excel in tax services and planning. Keep an eye on the horizon, stay ahead of the curve, and be ready to meet the challenges and opportunities that these trends present. Your ability to do so will not only benefit your clients but also position your advisory practice for long-term success.

Empower, Innovate, Thrive: Take Charge of Your RIA Journey

In the world of RIAs, success is not just a destination but a continuous journey of growth and adaptation. Steering the future of advisory practices toward success requires deliberate and strategic actions that keep your firm ahead. Particularly, for those considering the move towards independence, this isn’t just a prospect; it’s an opportunity to craft a unique professional narrative. The evolving landscape calls for proactive measures, encouraging individuals to translate insights into action, break through barriers and redefine the way they approach wealth management.

Take the next step in crafting your path to success by checking out the full webcast: The Future of Running a Successful RIA.

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