Running a successful RIA business is about powering clients’ success in achieving their financial goals and optimizing their wealth. But RIAs often end up spending more time running the day-to-day business operations—including managing disparate tech systems—and less time working with clients.

In fact:

• 23% of RIAs named “time required to run a business” as a major challenge.¹

• Only 53% of the typical advisor’s time is actually spent on client-related activities.²

How can you execute on delivering the best client experiences and generate the capacity to drive growth?

Simplifying your operating and technology environment is one approach to foster sustainable and scalable growth. In fact, implementing processes and reducing complexity can lead to less operational demands, in turn increasing the time available to spend on client-related activities.

Four ways to help simplify your business:

1. Take stock of your willingness to change
Taking a business to the next level requires a willingness to adopt new tactics, learn new ways of doing things, and let go of the old ways of doing things. Consider things that have historically been within your control that could be limiting your growth potential or impacting the client experience.

RIAs—smaller teams in particular—may take on too much operational oversight, putting the business at risk of delivering sub-optimal experiences. If old ways of doing business are maxing out your resources, there’s limited or no opportunity for growth. Those experiences impact both the team and clients.

Embrace it: Assess your business’ limits and leverage the expertise of growth consultants, coaches, and other industry resources to stay open to change.

2. Define your plans for growth
RIAs who have invested the time to develop and articulate a clear vision for the business are more likely to see their efforts pay off and find success.

A defined roadmap with key milestones, goals, and timelines serves as a foundational guide to keep the business on track and efforts focused on the things that will advance the firm’s success.

Embrace it: Continually evaluate what’s working and what’s not to understand areas that could be optimized to deliver better client outcomes. Paying close attention to metrics—such as the number of clients per staff and revenue generated per advisors—can help you uncover trends and opportunities to operate more efficiently—all while better serving your clients.

3. Consider what could be outsourced
A survey from FlexShares³ revels that in 2022, 32% of RIAs leveraged outsourcing of investment-related services, up from 27% in 2020. According to Michael Kitces, providing investment-related services are one of the biggest consumers of an RIA’s time, falling just below working with existing clients and developing new opportunities.²

RIAs are wise to outsource the aspects of the business that can have the most impact on saving time, increasing productivity, and potentially reducing costs. Functions like trade desk operations, compliance, human resources, and other areas can be outsourced through third-party providers—sometimes with solutions that prove to be more cost-efficient than having dedicated in-house resources for those areas.

In particular, firms who outsource technology—everything from CRM to reporting to digital tools for business processing—cannot only save firms time and create more seamless and automated experiences, but they can reap the benefits of leveraging specialists to help guide decisions, strategy, and adoption.

Embrace it: As with any outside provider, the key to successful outsourcing is finding, vetting, and partnering with the one that’s best suited to your business’ size and needs.

4. Put technology to work for you
When you think about your technology spend in terms of a revenue percentage, is your tech investment paying off? RIAs spend about 3% of revenue on infrastructure while top quartile performers spend less.⁴

If you’ve already made a sizable investment in tech systems, there may be an opportunity to get more out of them. Are they being used to their fullest capacity? Are they fully integrated with your other systems to maximize their value? 57% of advisors say that the lack of integration between core software applications is their main pain point with tech.⁵

Applications like your CRM, planning software, portfolio management technology, compliance systems, and other tech should all be working together to create more efficiency within your firm.    

Think about any tech that you’re paying for that isn’t being used. If it’s not being used or if it’s tech that creates the need for workarounds and other solutions, there’s probably a better and more affordable way to operate. A 2022 Advisor Technology Study from InvestmentNews found that:

• 48% of advisors were fully satisfied with tech

• 56% perform an annual tech review

• 35% search for new tech every year⁵

Firms considering increasing their technology spend should be thinking holistically about solutions and about ways to improve the client experience—both today and into the future. Invest in new tools that support client collaboration and engagement like reporting, planning applications, and client portals.

Embrace it: Evaluate your current tech spend and systems and assess whether you’re getting the most out of what you already have. Eliminate any tech that isn’t working for you and invest in the client experience. Actively manage your technology as you do your relationships.

Simplify your business now
RIAs who take steps to reduce complexity can see benefits like improved productivity and increased efficiencies. But ultimately, simplifying the business can drive growth by giving you time back to serve your clients.

Whether you’re getting ready to launch your firm or you’re already up and running, the SEI Wealth Platform^SM offers RIAs a robust, customizable, and integrated tech solution. Learn how SEI offers custody, technology and service in a unified platform to help you simplify your business and carve out more time to spend with clients. Learn more and join the revolution.

Interested in tools for growth? The SEI Growth Lab  offers a variety of toolkits to help you connect to what matters most. Check out the resources such as business planning, scale with tech, and generate leads.

About the author:

Gabriel Garcia, SEI

Managing Director, RIA Client Experience, Business Development, and Strategy

• 30 years in the industry focused on helping RIAs develop and grow their practices

• Previous roles with Schwab, BNY Mellon’s Pershing, and E*TRADE Advisor Services

• Frequent speaker at industry and national conference

• Member of the Foundation for Financial Planning’s Advisory Board