The world of registered investment advisors (RIAs) is evolving, and the key to success lies in strategic organic growth. A recent panel discussion at the Wealth Management EDGE conference revealed that the leaders of these firms are focusing on building dedicated prospecting teams and niche marketing to drive growth. This approach is a stark contrast to the traditional 'eat what you kill' methodology, where advisors bear the burden of finding new clients. By centralizing key functions and creating organic growth hubs, these firms are achieving remarkable results.
Gary Roth, co-CEO of Modern Wealth, highlights a concerning reality: most individual RIAs are not growing. This is not a minor issue; it's a significant challenge. To address this, Modern Wealth has implemented a unique strategy. They have established organic growth hubs in Kansas City and Phoenix, where concierges take the lead in qualifying prospects, gathering data, and booking appointments with the right advisors. This centralized approach has contributed to Modern Wealth's impressive growth, reaching over $13 billion in assets under management after just one year.
The success of these organic growth strategies is not limited to Modern Wealth. Merit Financial Advisor, another acquisitive firm, has also invested in building a robust client prospecting pipeline. By taking the burden of finding prospects off the advisors' shoulders, Merit has seen significant growth. Kay Lynn Mayhue, President of Merit, emphasizes the importance of institutionalizing organic growth, allowing advisors to focus on their clients.
James Bogart, CEO of Bogart Wealth, offers a different perspective. His firm has grown solely through organic growth, using targeted marketing to prospects. By becoming subject matter experts in a niche, Bogart Wealth has attracted a strong base of clients. This strategy has led them to invest in a dedicated business development team, further enhancing their client prospecting efforts.
The industry is witnessing a shift towards organic growth, with many firms reaching maturity and seeking alternative growth avenues. Inorganic growth, driven by advisor retirements and business exit strategies, is also on the rise. Cerulli Associates' forecast predicts a significant number of advisors retiring over the next decade, leading to increased M&A activity. This trend is further accelerated by the acquisition of Commonwealth Financial Network advisors by Merit, causing an unexpected bump in M&A.
In conclusion, the RIAs are embracing organic growth strategies to drive success and sustainability. By centralizing prospecting efforts, building dedicated teams, and focusing on niche marketing, these firms are achieving remarkable growth. This shift in approach not only benefits the firms themselves but also creates opportunities for advisors seeking a more structured and efficient way to grow their businesses.
