How elite RIA firms grow faster and more profitably than their peers

Steve Sanduski: Advisors with a specialized niche will always be in demand regardless of what happens with robo technology.

Steve Sanduski: Advisors with a specialized niche will always be in demand regardless of what happens with robo technology.

A relatively small number of RIA firms have grown faster and more profitably than their peers in recent years, according to research from InvestmentNews and BlackRock.

Dubbed “Elite RIAs,” these firms have cracked the code and implemented strategies, tactics, and “ways of doing business” that propelled them to the top.

On average, these Elite RIAs have > $500 million in AUM, $5.8 million in revenue, 13 full-time employees, 365 active households, and revenue per client of $14,327.

In today’s episode, Hollie Fagan, head of BlackRock’s RIA business, and I discuss the specifics of what these leading RIAs are doing to scoop up the lion’s share of industry assets.

(Download the transcript here)

5 Characteristics of Elite RIA Firms

Here are 5 ways Elite RIA firms separate themselves from the pack.

  1. A solid strategic planning process. Elite RIAs are very disciplined about the way they run their businesses and follow a rigorous planning process.
  2. Very specialized job functions. It’s not one financial advisor multitasking across different functions. They’ve identified the key roles within the organization that they need to deliver a valuable client experience. They have roles like a Chief Investment Officer, a Chief Marketing Officer, and a chief operational officer. When compartmentalizing management, the first executive-level hire is typically a Chief Investment Officer.
  3. A scalable business model. Processes, workflows, and technology are in place to ensure everything in the firm can grow rapidly and profitably. They often use model portfolios to scale the investment side.
  4. Understand the math behind their business. Elite RIAs understand who their most profitable clients are, where the referrals are coming from and various other metrics to ensure they are growing profitably.
  5. Go beyond comprehensive financial planning. They go beyond off the shelf planning software to create “bespoke” plans. It’s very individualized.

We also discuss a variety of other ideas and strategies for advisors and RIAs to grow their business including the key factors Elite RIAs expect will most likely contribute to their firm’s success over the next 1 – 2 years and how advisors can add value in the investment process that goes well beyond anything a robo-advisor can offer.

Be sure to listen to the podcast, read the transcript, and review the full study from InvestmentNews and BlackRock.

Download the Elite RIA study here.


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Steve Sanduski, CFP® is a FinTech entrepreneur, New York Times bestselling author, podcast host, and international speaker.
By | 2016-04-07T21:43:21+00:00 July 27th, 2015|

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