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The Secret to Sustainable Growth

The tremendous growth in the RIA space may have some advisors wondering how their firms will be able to keep pace given post-COVID challenges in the labor market.

In its 2022 RIA Benchmarking Study[1], Schwab reports that at the median, since 2021:

  • AUM increased 20 percent
  • The number of clients was up 6 percent 

Breaking this down further, the survey found that firms with AUM of: 

  • $100 million to $250 million, with a median asset base of $176 million, grew by 19% last year compared to a 14% five-year CAGR.
  • $500 million to $750 million, with a median base of $606 million, grew by 20% last year compared to a 14% five-year CAGR.
  • $2.5 billion and up, with a median asset base of $4.4 billion, grew by 19% compared to a 12% five-year CAGR.
  • The median growth rate for all firms last year was 19.5%, compared to a 14% five-year CAGR. This translated to a 23% growth rate for revenues, reaching a median of $3.2 million. 

Conservatively a 3.5% difference in growth rate represents an additional $100,000 in compensation for business owners—money they can use to pay for staffing, bonuses, or their entire insurance program.

The research shows that the median firm hired three people in 2021. Our client, Octavia Wealth Advisors, grew at twice the rate projected in the survey without adding a single operations employee. At $100,000 per head count, our client saved $300,000 while outperforming its peers. 

How can you drive sustainable growth without necessarily hiring more staff? By outsourcing and automating non-differentiating activities, like operations, so advisors can focus on their core capability—working with clients.

According to Schwab, top-performing firms use standardized processes and digital workflows more often than their peers. They spend nearly 20% less time annually per client on operations and administration than the median firm, those with $250 million or more in AUM.[2]

With support from a team of experienced consultants, you can run your firm with wealth management technology to: 

  • Automate workflows
  • Increase productivity
  • Standardize operations

By releasing advisors from time-consuming, non-differentiating activities, you can improve their job satisfaction as they are free to offer more clients more engaging experiences.

Driving sustainable growth with expertise from strategic partners

With help from LibertyFi consultants, you can configure your wealth management platform to create automated workflows that promote consistent and repeatable experiences for both advisors and clients. We collaborate with our strategic partners to deliver a seamless conversion process that includes:

  • Custodian integration
  • Investment mapping
  • Transition of client accounts
  • Wealth platform training in the Client Portal, model management, reports, and more
  • Platform configuration to meet your firm’s specific needs
  • Ongoing support to build advisor familiarity and confidence in the use of the platform

Our network of strategic partners

Beyond gaining support for your tech operations, you can also benefit from our strong relationships with trusted strategic partners. These partners focus on the non-differentiating areas of your practice so you can concentrate on helping clients. Our partners include:

  1. Custodian - Consultants from The RIA Works generate the custodial paperwork you need to establish accounts and transition clients. The RIA Works send you packages that you can forward to clients or review with them in person.
  2. Investment management - OCIO experts from WealthShield can provide your clients with personalized investment strategies at scale.
  3. Compliance experts from AdvisorAssist can review business processes to ensure they promote regulatory compliance. These partners can also help with an SEC audit.
  4. Business experts from Wealth Advisor Growth Network (WAGN) have over 45 years of combined experience building and running RIAs.
  5. Advisor services, including tools, operational solutions, and investment support services, from ORG Partners.
  6. Insurance services from AIK2 to cost-effectively ensure and protect your most valuable asset, your firm.

Download our network of strategic partners here.

Integrated wealth management software supported by technology consultants can help you cost-effectively scale your firm. Start achieving your business goals by providing advisors and clients with more consistent, streamlined experiences. With our expertise running RIAs with technology, we can help.

For help driving growth, contact Alli Jordan at LibertyFi: libertyfi.com/contact.

[1] https://content.schwab.com/web/retail/public/about-schwab/schwab_ria_benchmmarking_study_2022_deck.pdf
[2] https://advisorservices.schwab.com/managing-your-business/business-consult/ria-benchmarking-study-results#beacon-deck---full-88366