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How to Commit to Organic Growth as a Young RIA

RIA firms are finding it difficult to grow outside of M&A and market performance. The timing may be perfect for RIAs to commit to organic growth and all that it reveals about who they are, who they serve, and why they do what they do. Dennis Morton, co-founder and principal at Morton Brown Family Wealth, discusses steps to creating a successful organic growth strategy.

In late 2017, my partner, Katie Brown, and I were in the planning stages of creating a vision for our own wealth management firm. After spending over 10 years together in the RIA space, we felt we had the experience and drive to create something truly compelling.

At that time, we saw two dominant growth factors in the RIA space: M&A and market growth. As conditions became more accommodative to mergers and acquisitions, industry peers were acquiring and being acquired. There were alluring tales of the resources and scale afforded by bolting advisors onto a practice or hitching your wagon to a larger platform. The entire industry expanded assets under management as a decade-long bull market continued.

Early on, we asked ourselves an important question: How do we grow in a way that makes us better advisors, better leaders and defines our culture?

The answer has been one of the most important epiphanies since the founding of Morton Brown Family Wealth in 2018. To build a resilient business, learn everything about who we serve and challenge our team to perform at its best, we needed turn away from the trends of the day and commit to learning how to grow organically. We are proud to have surpassed our growth goals, achieving $260 million in assets under management and serving over 190 households in less than five years.

Market movement, industry news and recent studies are all pointing to the same thing: RIA firms are finding it difficult to grow outside of M&A and market performance. The timing may be perfect for RIAs to commit to organic growth and all that it reveals about who they are, who they serve and why they do what they do.

Here we share a few steps we found helpful in creating a successful organic growth strategy:

Define Your Goals and Don’t Be Afraid to Think BIG

Our team has become very comfortable with talking about our big, hairy, audacious goal (BHAG) for the next 10 years. The path to creating such a goal started with asking ourselves some important questions: What would our firm look like if we fulfilled our potential? Who would we serve? What would we need to do differently or the same? We tossed around numbers and metrics, strategies and tactics.

As the data sank in, Katie and I stepped back and reflected on an important truth: Our commitment to organic growth meant putting all our eggs in one basket: The basket of “us.”

“Us” as in our team, our clients and our vision. We would not focus on recruiting, financing deals or market momentum. We needed to turn inward and learn our strengths and values better than we had ever understood them before. We needed to look outward at the ideal families who we wanted to serve and design our firm in their image. We needed to cast a unique vision for the future that would define what it meant to be a part of our growing community. It was our belief that if we did those things well, the laws of attraction would kick in and we would grow toward our goals.

Start From the Ground Up

Our first step to set the conditions for organic growth occurred in the infancy of the firm. As founders, we worked through a brand DNA exercise. The outcome was a one-page creed that contained Morton Brown Family Wealth’s vision, mission and language that authentically defined what we were setting out to do. Every candidate saw our creed in the hiring process. Every client who made the leap to join our firm received it in their welcome packet. It clearly defines who we are and the foundation for the services we provide. During this process, we also defined growth in a way that made sense to us. We did not want to grow for the sake of growing. We wanted to serve more families. To do so, we had to be able to communicate why families should choose Morton Brown.

Build the Right Team

Our next exercise was more aspirational. We created a 20-person organizational chart. There may have been three of us in the office at the time, but we were starting with the future in mind. With so many professional slots to fill, we had to think about what we did best and what our clients would expect from a premier advisory firm. Early on, Katie and I wore all the hats (advising, planning, investing, managing, etc.). But over time, we would take them off, one by one, to focus on the best use of our talents as leaders. Now, every time we hire and during every annual planning meeting, we pull out the organizational chart and ask ourselves how we can serve more families by growing our talented team.

Define Your Ideal Client

Another critical step on our organic growth journey has been defining a profile of our ideal client. At first, it was a broad stroke profile of “John and Sandy” and their aspirations, expectations and interests. We thought of what made them unique through their chosen line of work, such as business owners or professionals. This helped us better identify future clients and ensure we had the right placement and opportunity in our community to build fruitful relationships.

Identify Your Strengths

Over time, we found that our deepest connection with our ideal client was founded in our ability to relate to them as a couple. We started to listen more intently in introductory conversation to their challenges in communicating about money. We asked better questions of clients whom we had helped put on a common path to financial confidence. Before long, a niche emerged in working with spouses, couples and partners to help them plan their financial lives together.

Finding our niche is a by-product of that initial commitment to organic growth, and it is reason why we are ahead of our BHAG plan.  Our focus on this niche may not have materialized had we not committed the time to understanding our DNA, our team, and our clients. 

Our journey in leading Morton Brown Family Wealth has only just begun. As leaders, Katie and I are especially feeling the pang of growing pains as our team and client base expand. That being said, we feel even more committed to our organic growth strategy and look forward to serving more families for years to come.

 

dennis round.pngDennis Morton, CFP, ChFC is a financial advisor and student of investing who enjoys both sharing and gaining knowledge from peers, professionals, and business leaders. He is the Co-Founder and Principal of Morton Brown Family Wealth, an SEC-registered Investment Advisor headquartered in Eastern Pennsylvania. He studied history in college on an Army ROTC scholarship followed by four years on active duty as an Air Defense Artillery (PATRIOT) officer in the United States Army. For his service in Operation Iraqi Freedom, Dennis was awarded the Bronze Star Medal. With an appreciation for the past and exposure to critical thinking and leadership, Dennis decided to apply those skills in a field where the stakes are high: personal financial planning. After working for ten years in larger financial institutions, Dennis and his business partner launched Morton Brown Family Wealth with a passion for serving families with complex wealth management needs. In just three years, his RIA nearly doubled in size through organic growth, breaking the $250M AUM threshold in 2021. Dennis believes that the leading advisory firms of the future will be defined by professional excellence and their ability to lead an excellent business. He is a seeker of understanding and enjoys both sharing and gaining knowledge from peers, professionals, and business leaders. Dennis is a dynamic speaker, podcast host, moderator, and contributor to events for business leaders.

 

Dennis Morton is a part of our exceptional speaker faculty that will be taking to the stage at RIA Edge 2023. Find out more >>

 

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