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How Can Financial Advisors Best Leverage the Opportunities in Front of Them?

Focus on marketing outreach, technology and talent.

Demand and need for RIAs is at an all-time high. Factors such as record inflation, rising interest rates, regional bank failures, and the pandemic retirement surge have created an environment in which more people are seeking the fiduciary standard that distinguishes RIAs from other financial services. For independent advisors eager to meet this demand, I encourage you to scrutinize three key areas of your firm: go-to-market strategy, technology and talent.

Refine Your Go-to-Market Strategy

If you want to achieve consistent growth year after year, it is crucial to have a measurable and repeatable go-to-market strategy. This is your client acquisition process, encompassing your target audience, channels for outreach, value proposition and methods for converting interested prospects into customers. My recommendation—to firms of all sizes—is to conduct a comprehensive review of your prospect-to-client journey.

Outlining the process as-is vs. as you intend it to be will help you identify gaps or weaknesses that may be causing breakdowns for prospective clients. Experimenting with new channels to attract additional potential clients is a worthwhile effort if you haven’t found a repeatable process. On the flip side, double down on successful strategies. If you’ve already found something that’s working well, consider what it would take to scale it up. For most RIA firms, less is more. Finding the top 1-3 things that drive meaningful new business opportunities, and that you can stick to, is a common characteristic of most high growth firms.

Your GTM strategy will require constant refinement as your business grows and evolves. Make a habit of getting the team together, pulling out the whiteboard and firing up a healthy, honest discussion.

Boost Operational Efficiency through Technology Investments

A great client experience demands operational efficiency. A 2022 Vanguard study reveals that clients appreciate human interaction for relationship building and empathetic listening skills, but prefer technological solutions for tax management, portfolio construction, diversification and market insights.

The software market for RIAs has exploded over the past few years, providing advisors with access to high-quality, cost-effective tools that streamline account opening, account funding and transfers, rebalancing, tax management, fee billing and performance reporting. Where possible, integrate tech into your business so you can allocate more time to high-value activities like relationship management and business development.

Keep in mind that there is such a thing as too much tech. If you are not regularly using an application or service multiple times per week, it’s probably not adding much value to your firm or clients. Building a high impact, easy to use tech stack, is the best way to accelerate growth.

Build a Highly Capable Team

I have observed (and committed) countless mishaps trying to grow by adding headcount. A combination of mistakes, luck and over 20 years of experience has led me to the following conclusions.

Before you hire additional practitioners, make yourself a superhuman advisor. If you’ve established a solid revenue base and have defined and documented your processes, supplement yourself with support staff. Hire people who can handle non-revenue generating activities like administration, operations and finances, so you can focus on growing the business.

When your client portfolio exceeds your capacity to manage alone, consider offloading a portion of your book to junior advisors (in the best case scenario, your junior advisors are homegrown talent that started out as support staff but demonstrated the interest and aptitude to grow into a practitioner role). For senior hires, look for mission alignment and shared values.

A winning team is a talent-dense team. It can be hard to find high-quality talent in such a competitive market, so I advocate compensating above-average talent generously when you’re confident of their abilities to 1) return ample time to your calendar, or 2) increase revenue per employee—ideally both. It’s better to have a smaller, but high talent team, than a larger, fragmented team.

Assess, Adapt and Move Forward

Regularly evaluating the themes addressed above will help your firm overcome new challenges through all stages of growth. While the day-to-day pains and priorities of different advisors will vary, the overarching message remains consistent for firms of all sizes: align your acquisition strategy, technology, and talent with your target market to ensure you're ready to meet the fast-growing demand for the services offered by your firm.

Jason Wenk is the founder and CEO at Altruist

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