RIA Thrival Guide
How to maintain your independence and grow your practice
Many financial professionals who have chosen the registered investment advisor (RIA) path value independence—free of big brokerage ways of working, free of acquisition pressure, and free to work directly with their clients the way they feel is best.
With an entrepreneurial spirit and the grit to withstand the challenges of a startup business, the most successful independent firms have found ways not only to survive, but also to thrive. Let their strategies and tactics be your guide.
Building a Fire
One of the first steps in surviving the wilderness is to build a fire. And the RIA channel is on fire—it’s becoming the hot choice for clients and burning bright with opportunity. RIAs who thrive will be those who keep the fire going.
As the RIA channel has grown, advisors who run independent firms are competing with major brokerage firms and attracting the attention of large investors. It’s no wonder. From the perspective of opportunistic private equity investors, “The RIA channel represents more than $3.7 trillion in acquirable assets.”1
And although industry-wide assets under management (AUM) declined in 2022 (only one of three years that’s happened over the past two decades, along with 2002 and 2008)—nevertheless, smaller boutique firms saw incredible growth.2
The Growth of RIA Firms
% Growth Rate by Advisor AUM Over the Last One, Five, and 10 Years
In the last full year reported, 2022, the smallest firms grew by 30% while assets for the largest firms fell by 15%. Looking at the longer time periods calls to question whether—and how—smaller firms can keep the fire going and achieve sustained growth.
Adding Fuel to the Fire
The growth of 2022 is remarkable. But will the flame go out? According to the Investment Adviser Industry Snapshot 2023:
“In the unfavorable market environment of 2022, advisers with over $100 billion experienced the sharpest decline in assets under management, as securities values fell and firms moved out of the category. Conversely, in 2022, on a net basis, firms moved into the under $100 million category, and assets in this category increased dramatically in percentage terms. Longer term, the assets under management in this size category have been flat because firms in this size range generally either move into larger size categories or terminate SEC registration.”
Longer term, the assets under management in this size category [under $100 million AUM] have been flat because firms in this size range generally either move into larger size categories or terminate SEC registration.
— INVESTMENT ADVISER INDUSTRY SNAPSHOT 2023
Assembling Your Resources
While adventurers must seek shelter, water, and food to survive, independent advisors must gather the resources proven to help RIAs thrive in a competitive environment.
Consider the tools and tactics employed by the top advisory firms:3
Ideal client profile (ICP)
Client value proposition (CVP)
Standardized workflows
Written strategic plan
Written succession plan
A Legacy of Industry Leadership
Founded in 1927 by financial services education pioneer Dr. Solomon Huebner, The American College of Financial Services has a rich history in financial services education—standing strong as the standard-bearer for academic quality.
As we approach 100 years of academic excellence, we hope that you leverage all the opportunities The College has to offer. By taking part in The College’s recertification program, you’ll be joining us on the front lines as we march the financial services industry toward a future that benefits more Americans and allows us to change more lives.
Your Life's Work
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