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Lessons From the Fastest-Growing Firms

What differentiates these firms from their peers?

We took a look at the fastest growing RIAs in the Dynasty Network and sought to determine what differentiates these firms from their peers. What are their strategies for attaining a high level of growth and what recommendations do they have for other RIAs?

I got insights from four advisors:  Brad Griswold, Managing Partner of Corbenic Partners in Bethlehem, PA; Bruce Lee, CEO of Keebeck Wealth Management in Chicago, Jack Petersen, Managing Partner at Summit Trail Advisors in NYC and Michelle Smith, CEO of Source Financial Advisors in NYC.  Here are their thoughts:

Strategies for attaining a high level of growth

There are many different paths to achieving growth for advisory firms which can include organic and inorganic as well as starting new business lines and launching investment initiatives.  These four advisors spell out their specific strategies for expanding their business.

Keebeck Wealth Management CEO Bruce Lee decided in the early stages of launching his firm to focus his business on providing intellectual capital.  He saw the opportunity to grow his overall business through a multi-channel strategy.

As a newly formed RIA, Bruce purposely set up his business model from the beginning to be flexible to include an array of investment offerings including a hedge fund, private equity offerings and real estate investments.  Bruce determined that these various initiatives help drive business to his wealth management business and believes that investors are seeking quantitative skills and intellectual capital and will pay for it.

“This is the type of business I was peripherally involved with at my prior firm but the structure there didn’t allow me to participate fully in collaborations on hedge funds, private equity and real estate on behalf of my clients.” said Bruce.  “Now I can create a structure that lets me lean into intellectual capital and to offer my clients unique and bespoke alternative investments.”

Corbenic Partners Brad Griswold completely repositioned his practice for growth in 2019.  As he faced staffing changes, he decided to re-establish priorities and instill discipline when it came to his practice.  This involved developing a keen focus on his existing book to seek additional opportunities.

“We never did inorganic; our focus is organic.  We keep our head down and stick to our knitting,” explained Brad. “As we tilt into planning, the conversations are changing.  Fees are not part of the conversation - we are adding significant value that is recognized.”

In addition to organic growth, Jack Petersen of Summit Trail Advisors is building out their national footprint with a highly selective M&A plan.  Summit Trail has added a number of large RIAs to its platform over the last year and opened new offices in Pennsylvania and Seattle to accommodate the new advisors.

Although he admits that he greatly underestimated the difficulty in M&A, the firm has found success in sticking to a disciplined process and focusing on the cultural fit, client fit and organic growth potential of the tuck-in.  For example, if the majority of an advisor’s practice is with clients below $5 million in assets, they are not likely a good fit with Summit Trail with their focus on families with $25 million and up.

According to Jack, “We have found that most advisors don’t want to run their own business.  We are looking for those that want to be part of something special.  That said, we proceed with caution.  If a deal is dragging on, maybe it’s just not meant to be.  It shouldn’t be that much work.”

Michelle Smith, CEO of Source Financial Advisors, is one of the leading divorce advisors in the US.  The nature of her business – which is focusing on women undergoing major transitions usually involving divorce – requires Michelle and her team to spend significant amounts of time educating and hand holding her female clients – many of whom have never been involved in their finances before. 

Michelle had a brainstorm: her idea was to create a special offering to these women – in effect, a program that would provide a year of educating and transitioning these women learning how to manage their own accounts.  Michelle launched her new program “wife2cfo” to a small group of clients to great acclaim.

Michelle said, “I've learned that I'm not an inorganic person; with the right staff, I want to bet on myself.  And the assets are following with my new business model focused on wife2CFO.”

 One Piece of Advice

We asked these four advisors for one piece of advice they would give to an advisor seeking growth:

Brad’s advice:  Know where your growth is coming from.  And make sure your back door is shut. You don't want clients leaving and you need to stay on top of relationships.

For Bruce, he believes that you should focus on getting paid for all the business you are handling -- Bruce handled business transactions and referrals at his prior firm but was not compensated for it.

Jack made the following point regarding M&A: “If money comes up in the first meeting that can be a red flag.  Instead, we want advisors to ask about the client experience, investment approach and our value proposition at the onset.”

Michelle added: “Find the things that you're not charging for - do you have a process that you want to monetize?”

There are a vast number of ways to grow your business:  M&A, launching new business lines, opening new offices, etc.  But each firm needs to decide which strategy is going to work well for them.  These four advisors shared vastly different strategies for growing their business – and they are all effective. 

Ed Swenson is COO of Dynasty Financial Partners.

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