The list of large RIAs had a mean Freewheel Score of 25.3 and a median score of 20.3, while the fastest growers had a mean score of 31.9 and a median score of 25.9.
“In the 50 fastest growers, the AUM bandwidth is variable, so there’s a lot of very tiny shops growing quickly, and some very successful larger shops also expanding their footprint,” Norden says. “Top to bottom, regardless of size, technology is a differentiator. It’s an equalizer. We’re no longer looking at a sales-driven arms race, we’re seeing that small firms can be innovative and use technology to level the playing field.”
The set of large firms were more likely to use lead conversion tools, programmatic ad buying and retargeting campaigns than fast growers, while fast-growing firms were more likely to include social media widgets and sharing tools on their websites.
Alexandria Capital, a Tarrytown, N.Y. RIA with about $630 million AUM, was singled out for its technology and growth -- the firm ranked 11th in Financial Advisor’s 2016 list of fastest growing RIAs, and was singled out as a high-scoring, boutique firm.
“There are smaller businesses, some as small as $200 million, that are building around technology right now, and that’s a little surprising,” Norden says. “Firms that are doing that should be well-positioned for the future, while their peers that are older and adopt new technology on more of an ad-hoc basis are going to struggle to match the rigor.”
Norden’s custom dataset revealed that, after deciding to embrace digital, the when, where and how of technological implementation makes a big difference for advisors.
“Marketing automation tools were scored more heavily than others, and for good reason,” Norden says. “If you’re making a foray into digital marketing, this is the best place to start. All of these other tools work with the automation platform, it’s a hub that all the other spokes in a digital marketing toolkit emanate and revolve from.”
Even a relatively simple addition, like the use of a blog on a company’s website, correlated with faster growth.
“The apparent effectiveness of blogging was one thing that really jumped out at us,” Norden says. “Among the set of largest RIAs, only 45 percent included some kind of blog on their website. But 74 percent of the 50 fastest growing RIAs were blogging regularly. That’s not any coincidence.”
Yet blogs have become an afterthought for many financial companies because some didn’t want the compliance risks that come with publishing opinions and personal thoughts online, notes Norden.
“Blogs were something that people considered lowbrow, and many financial firms were afraid to move in that direction,” Norden says. “Most companies favored research and quantitative data instead of real-time, personal, topical posts. That is a mistake.”