Be careful what you wish for if you are a large registered investment advisor hoping to top the $1 billion AUM mark, says new Cerulli Associates research.

The billion-dollar plus RIAs face challenges smaller firms do not face and grow at a slower rate, according to the third quarter issue of The Cerulli Edge – U.S. Advisor Edition released Monday.

“As smaller RIAs reach $500 million or more in assets, they transition from a practice to become a functional business, but as firms surpass $1 billion in assets, they reach a new phase in their business lifecycle,” Kenton Shirk, a director at Cerulli, a global research and consulting firm, said in a statement. “In many cases, they begin to support a growing number of advisors across multiple locations, and as they centralize services and resources, they develop a home-office support structure analogous to that of a broker-dealer.”

Once they top $1 billion, RIAs have to build scale across a large number of advisors, enhance advisor productivity and offer a consistent and positive client experience across a large organization. An executive management team is needed including a chief operating officer, chief compliance officer, and chief investment officer, Cerulli said.

Operating a large business entails institutionalization of processes, multi-advisor teaming, centralized staff support, specialized roles, a well-defined organizational structure, efficient implementation of technology, proactive financial management, inspiring leadership, and a consistent experience across client segments. This requires independent advisors to build not only professional investment, planning, and business development competencies, but also entrepreneurial and leadership capabilities, according to the research.

In 2012 there were 436 billion-dollar RIAs, a number that grew to 687 by the end of 2016 with 99 of those surpassing $5 billion in assets, accordign to Cerulli.

Billion-dollar RIAs grew 9.8 percent annually from 2012 through 2016. RIAs with $250 million to $500 million in AUM grew 11.8 percent, and firms with $500 million to $1 billion AUM grew 10.6 percent, according to the report. The seven RIAs with $10 billion or more at the beginning of the five-year period grew only 6 percent.

But “the RIAs that can overcome these challenges could ultimately become formidable competitors among wealth management firms,” said Shirk.