These firms are also looking for ways to improve operational efficiencies and are adopting technology solutions that can automate routine back office tasks and deliver administrative support. They are taking advantage of digital account-opening workflows, e-signature, rebalancing investment management tools and single-sign-on dashboards to manage their technology applications.
Keep New Business Future-Focused
When RIAs begin running more like corporate business enterprises in earnest, they shift to a future-focused strategy that hinges on bringing in new clients to the firm, versus their peers that take a more passive approach.
These are the firms that are hosting seminars and educational events, expanding their centers of influence, and actively seeking new business. They are not relying on existing client referrals to grow.
Standout firms that we studied say that 60 percent of their past growth depended on bringing in new client assets and 75 percent of their future growth depends on their new business efforts. Conversely, other large RIAs attribute existing client referrals as the overwhelmingly dominant driver of their growth—past and future.
This hunger for new business separates the most successful RIAs from the rest: the 19 percent annual revenue growth rates of these RIAs are nearly twice that of their peers.
Three Fundamentals Drive Success
Success isn’t always found in headline-making moves such as recruiting high-profile rainmakers, rolling out big-budget marketing or advertising campaigns, buying the latest gee-whiz technology, or making acquisitions—particularly for smaller firms.
Instead, outstanding growth is a product of executing on basic, business management fundamentals: appropriately pricing services; building efficient, high-performing teams; and rigorously pursuing and onboarding new clients.
This requires relentless determination from the advisor, along with the belief that there’s always a better way to get the job done. Remember: all firms accumulate valuable experience and skills at each stage of their development, but it’s the RIAs that harness and use them to their advantage that ultimately excel.
Vanessa Oligino is managing director of business performance solutions at TD Ameritrade Institutional.