It's important to note that not every RIA within this AUM range should give up its independence. The real test is whether managing daily operations is hampering the advisor's ability to growth. If the firm has the motivation and ability to conceive and execute such a strategy, then they may want to stay completely independent.

Drowning In Detail
Daily business operations are not the only challenge facing small independent RIAs. The fast pace of evolving technology and regulations can also hamper an RIA's ability to focus on managing relationships and growth. Many of these firms make up for their lack of scale by outsourcing everything from portfolio management to regulatory compliance. This strategy comes with its own complications, including choosing the right systems, managing third-party vendors and integrating tools into existing platforms.

Consider Joining A Larger RIA
Being an independent RIA has been a great business model for advisors yearning for complete decision-making control. Many successful practices have been built over the years by entrepreneurs who have built their reputations by focusing on serving the financial needs of their clients with distinction. But the current competitive landscape and the changing market, technology and regulatory environment are making it harder for smaller firms to thrive.

Firms with between $125 to $150 million AUM and no clear path toward growth, might be better served becoming an IAR under a larger RIA. We often hear from advisors that giving up their RIA and transition to a larger firm gives them the piece-of-mind to know that others will manage their operations and compliance so they can focus on what they enjoy most—managing relationships.

Mark Contey is senior vice president and head of business development at Chicago-based LaSalle St., an independent wealth management firm with over $12 billion in assets and 300 financial advisors.

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