Registered investment advisors face an uneven playing field in which smaller firms are often overshadowed by larger ones. The vast majority of RIAs – 93%, to be exact – have less than $1 billion in assets under management. If you’re ready to scale your growing RIA and increase your firm’s market share, you may need to get a little creative in your approach.
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Why Does Scaling Matter for RIAs?
Scaling a business means increasing not only its size, but also its revenues and profitability. Both of those things are essential to your firm’s long-term sustainability and success. As your firm’s client base grows, it follows that revenues will increase. More revenue means more money to invest in continued growth.
Focusing on scaling makes it possible to:
- Increase operating efficiency, saving both time and money
- Carve out a name for yourself in your chosen niche and attract clients away from your competitors
- Diversify the range of products and services you offer, allowing more opportunities to reach untapped markets
- Attract and retain top talent to your firm
- Improve client satisfaction and increase engagement
- Anticipate and manage risks
- Retain existing clients and attract new ones
Are there challenges in scaling an RIA? Certainly. But you may find that it’s worth facing the hurdles to realize tangible growth in your firm.
Ideas to Scale Your Growing RIA
Your approach to scaling can depend on your goals, budget and where your firm is starting from. Here are a few strategies to consider as you focus on gaining new clients.
1. Play to Your Strengths
How many hats do you wear in your business? Do you only serve clients, or are you also handling the front and back office tasks, producing marketing plans and taking the lead in business development?
It’s tempting to try to do it all yourself when your firm is smaller or your budget for outsourcing is limited. That can backfire, however, if your plate is so full that you’re unable to deliver top-tier service to your clients or manage all aspects of the business in an efficient manner. As a result, you could limit your growth rather than further it.
A better strategy for scaling is to focus on what you do best in the firm, and delegate or outsource everything else. For example, some companies specialize in handling back-office operations for financial advisors.
It may take some financial investment to hire new staff or purchase software, but it can be worth it to free up time that you can devote to nurturing client relationships.
2. Establish Workflows
Workflows and systems are part of the bedrock of a successful RIA firm. Establishing workflows allows you to streamline repetitive tasks that may be draining time from your day and offer a better user experience to clients.
New client onboarding is an excellent example of how you can use workflows to your advantage. When you offer clients a seamless, automated onboarding experience from start to finish, that sets a positive tone for the relationship going forward. It also helps keep all members of your team on the same page if they’re able to look at a client’s onboarding file and immediately recognize where they are in the workflow.
Customer relationship management (CRM) software can be invaluable for creating and implementing workflows for onboarding and other operational processes. Some of the best CRM programs allow you to create templates for client forms and communications, and fully integrate with other tools in your tech stack.
3. Fine Tune Your Lead Generation Strategy
It would be nice if new clients would simply fall into your lap, but that’s not realistic. What is realistic is having a solid strategy in place for generating leads.
Financial advisors can employ a variety of strategies to generate leads, including:
- Social media
- Content marketing
- Search engine optimization (SEO)
- Email marketing
- Direct mail
- Influencer marketing
- Digital ads
- In-person events
- Local advertising
- Referrals
- Lead generation services
If you’re committed to scaling your growing RIA, you’ll need to figure out which lead-generation strategies deliver the best results.
For example, if you’re interested in driving more referral traffic to your firm, put yourself in your current clients’ shoes. Ask yourself what value you offer that would encourage them to tell their friends, family members or coworkers about your firm.
Do you consistently exceed client expectations? Are you leveraging AI and other forms of technology to improve the client experience? Do you show your appreciation through client events or a referral loyalty program?
If you’re not getting as many referrals as you’d like, these questions can reveal clues about where you may be falling short.
4. Form Strategic Partnerships
Partnerships and collaborations are part of a sound business development strategy. Some of the ways advisors can build strategic partnerships and promote their firms include:
- Networking, both online and offline
- Participating in financial conferences or workshops as an expert panelist or guest speaker
- Creating centers of influence with other professionals in the financial space who may be able to generate referrals for your firm
- Utilizing technology platforms and applications to simplify operations and/or gain broader exposure for your business
For example, say you’re looking for a way to expand your marketing efforts without having to do a lot of heavy lifting. You might partner with an advisor marketing platform that enables you to connect with leads and gives you the tools you need to follow up.
Alignment is key to making strategic partnerships work for you and your partners. Partnerships are most effective when they exist for the pursuit of a common or mutually beneficial goal and are founded on shared values or vision.
Taking time to define your firm’s goals and what you bring to the table can help you identify partners that may be a good fit.
Frequently Asked Questions (FAQs)
How Can I Get More Clients for My RIA Firm?
Getting more clients for your RIA firm often requires a multi-pronged approach. For example, you might be using social media to attract prospective clients to your website, offering lead magnets to encourage them to join your email list and generating leads through an advisor marketing platform. RIAs can also use referrals to connect with prospects who are looking for an advisor to work with.
How Can I Grow My RIA Firm?
Driving growth in an RIA firm takes planning and strategy to figure out which tactics are likely to yield the best return on investment. Emphasizing client user experience, and utilizing technology and targeted marketing are just some of the ways to grow and scale an RIA.
How Can RIAs Use Benchmarking to Grow?
Benchmarking means measuring your firm’s operations against your competitors or the financial services industry as a whole. For example, you might benchmark your firm’s marketing plan against your largest competitor to gain insight into what they’re doing right and how you can adopt similar measures to grow your business.
Bottom Line
It can take time and patience to scale your growing RIA firm. These strategies – playing to your strengths, establishing workflows, fine-tuning your lead generation strategy and forming strategic partnerships – can help you formulate a plan to follow as you work toward your desired level of growth.
Tips for Growing Your Advisory Business
- Establishing a digital footprint is more important than ever, as clients increasingly turn to online searches to find advisors to work with. Building out a website is a good place to start, but it may take more than that to attract your ideal clients. If you’d like to fast-track your marketing efforts, a platform like SmartAsset AMP can help. You can get connected with leads and access the resources you need to build relationships with prospective clients. Schedule a demo to learn how you can use it to grow your business.
- Tech tools can enhance your firm’s ability to scale and grow, though some may prove more useful than others. A good CRM, accounting software, financial planning software and compliance software are just some of the solutions you may want to include in your tech stack.
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