“Each of these areas have their own unique focuses and metrics and challenges, but really what we're seeing is that sub-$100 million space is the entry for the market—that new advisor jumping into the space, feeding that interest and feeding that new attempt to find success on their own independence and building their firm from scratch,” he said.

The report also looked at consolidation and found that the addressable market for RIA acquisitions could top $3.2 trillion over the next five to 10 years. Of that, nearly $2.3 trillion lies in the “impending advisor succession crisis,” while $528 billion reflects breakaway advisors moving to the independent model; another $476 billion could be found in growth-challenged RIAs that see a sale as their best option.

“Strategic acquirors are able to make those transactions, help support those firms and give them the monetization opportunities they need while ensuring that those teams and those clients are brought in under a new umbrella,” Caruso said.

And to help them reach the next level of growth, more RIAs are adjusting their staffing. For the first time more than half of RIA firms have embraced a team structure, the report said, with 21% using a peer system and 31% using a team hierarchy with either single or multiple leaders.

At the firms with more than $500 million in AUM, specialized staffing is more evident than ever, with 52% having dedicated financial planning specialists, 45% having research analysts, 42% having compliance professionals and 26% having dedicated marketers.

By comparison, only 21% of RIAs on the whole (encompassing the vast swath of small RIAs) have dedicated financial planning specialists, only 15% have research analysts, only 18% have compliance professionals and only 14% have dedicated marketers.

“At practices with specialized staffing, advisors are spending 58% of their time on client-facing activities. If they do not have specialized staff, they're spending 52% of their time on client-facing activities. When you have specialized staffing, you're spending six percentage points more time on client-facing activities,” Caruso said.

“I understand that thinking about time in percentages can be difficult, but every incremental bit that advisors can gain back in their time and focus on client-facing activities helps the growth of their firm revenue-wise, helps their engagement with clients, helps them to develop referrals, and helps them be more present in their practice.”

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