The Power of Partnerships
Most successful RIAs today are partnerships. They may not call themselves partners and may think of the firm as a corporation, but at the end of the day their firms are powered by the skills and talents of a well-organized group of individuals. This group may be large: Some RIAs have 50 or more owners (partners). Whatever their titles may be, the spirit and culture of the “partner” group is critical to the success of the firm.

The key factors for success include the relationships among the owners, the culture of the ownership group, the owners’ compensation and the leadership style of the group. Our simulation participants witnessed firsthand how important it is to consider the nature of the ownership group.

Difficult questions about ownership include:

• Who should be the owners of the business?

• What does it mean to be an owner, and what do we expect of owners?

• How can we motivate owners?

• How can we compensate owners?

• How do we succeed founders?

These questions have no clear answers, but the success of the firms depends on them. Answers emerge out of healthy and thoughtful dialogue among the firms’ leaders. The best answers are those that keep the owners engaged and passionate about the business.

We believe that the lessons we learned in this simulation mirror the lessons the next generation of leaders are learning as they take over advisories. G2 leaders are talented and skilled. They lack only the experience of what it really feels like to “drive the car.” The reality is perhaps different than expected, but it can also be more exciting than imagined. As Mario Andretti says, “If you think you are in control, you are just not driving fast enough.”


Bob Oros is executive vice president–head of sales and relationship management for Fidelity Investments.
Philip Palaveev is CEO of The Ensemble Practice, a consulting firm based in Seattle.

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