A giant bet by private equity firms on the growth potential of the RIA business is about to be called. Put another way, the investment firms that paid premium prices for RIA firms during the pandemic are going to find out if the law of large numbers will pertain to this highly personal service industry.

A few obvious questions arise. Most RIA firms were built on the backs of highly charismatic founders who were skilled rainmakers and could bring in a consistent stream of clients. As long as a firm remained relatively small—in today’s world that’s less than $1 billion in assets—it could rely on one or two principals for most of its client acquisition.

Some rainmakers were skilled enough at training to teach and transfer this talent to a handful of junior partners. Others either refused to share their marketing secrets for proprietary reasons or lacked the ability to work in a collegial way.

But after selling their firms to private equity buyers and next-gen management, many of these founders are retiring or pulling back from the business. Meanwhile, they are leaving behind much larger firms, businesses that can no longer rely on one or two people to each bring in seven to 10 new clients a year to reach double-digit growth.

This inflection point comes at a juncture when a decade-long bull market has come to an end and many clients are experiencing major life transitions as the world emerges from the pandemic. RIAs have enjoyed remarkable client retention rates north of 95%, a fact that encouraged private equity firms to pay premium prices.

But market research in the next few months is expected to reveal that more clients are willing to consider switching advisors than did before. The reasons are still unclear.

The combination of a bear market and a transition to Zoom meetings may contribute to their willingness to consider moving. Maybe they have needs that aren’t being addressed. And just because they say they’d contemplate a move doesn’t mean they will.

All this presents a challenge for large firms undergoing a change in management, though. Big firms face the dual tasks of retaining huge client bases while adding dozens of new clients annually if they are going to post the results their new owners expect. Furthermore, they may have to do it without the people who built the firms.

For smaller advisory shops that have retained their independence, this new playing field presents an array of opportunities. The next three years should offer an idea of who will be the winners and losers.

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