Registered independent advisors have plenty of runway to grow in 2024. But RIAs won’t get the liftoff they need without next-level strategies for lead acquisition and marketing.
This year’s Schwab IMPACT, hosted in our backyard at the Philadelphia Convention Center, showed just how far the RIA industry has come. A bustling crowd of 2,500 financial professionals and 2,500 more service partners would have been hard to imagine 20 years ago, when Robert Worthington took the stage and wondered aloud if smaller financial firms had any future. (Spoiler: they did!)
No matter where we turned, we couldn’t avoid conversations about growth. What services should RIAs incorporate into their offering for a more compelling client experience? What technologies and investments will spark the next wave of organic growth?
RIA marketers want the AI ‘easy button’
Look no further than Payton Guion’s coverage of a ChatGPT demonstration from Raj Madan, CIO and CTO of Advisor Engine. Phones shot up in the air as advisors sought to record a step-by-step process of crafting a client email in ChatGPT.
RIAs have always been tech pioneers, and early AI adopters of all sizes are already testing the waters. Note-taking and client communications tools are just the start. Marketing teams now explore generative AI as an engine for brainstorming, content creation, and personalized email marketing. Bluespring Wealth Partners’ new Blueprint For Growth relies on Catchlight’s AI insights to understand, prioritize and engage with prospects on a large scale.
We’re still in the early phase of AI’s transformation of financial services. But growth leaders at RIAs are already finding ways to use AI to punch above their weight.
Everyone wants organic growth ideas
The fundamental drivers of M&A aren’t going anywhere: RIA principals still need successors, exit plans, and the resources to contend with the generational wealth transfer that will likely define the careers of the next generation of advisors.
But it isn’t 2021 any more. Surging interest rates spelled the end of cheap capital for the foreseeable future. Serial acquirers have to justify the cost of the firms they’ve already purchased, and sky-high valuations mean they have to be picky buyers. The industry’s attention has turned to organic growth, and firms that kick around at 3-6% organic growth in this environment are treading water – at best.
Wise marketers and service partners have already pivoted to organic growth. We have never before seen this much attention paid to the lead funnel – and that’s a good thing. Marketers at larger firms want scalable processes and real-time feedback on what drives their success. Smaller RIAs want a reliable engine for organic growth to sustain their business or position themselves for a better valuation. And everyone wants new ideas.
RIAs aren’t household names (yet)
Ask someone in the financial services industry to list “name-brand,” national RIAs, and they may rattle off as many as a dozen firms – folks like Creative Planning, Wealth Enhancement Group, Mercer Advisors, Wealthspire, EP Wealth Advisors, or Captrust. Ask a typical end client the same question, and you might get a blank look instead. More likely, they’ll name institutions like Merrill Lynch, UBS, Goldman Sachs, or JP Morgan.
No one can deny the runaway growth of the RIA channel over the years. But what will it take for these firms who have assembled offices, talent and billions upon billions of AUM to achieve household name status? RIAs, unlike their Wall Street counterparts, are still very much defined by individual advisor personalities and the characters within the founder class.
For many professionals, that’s a feature, not a bug: independent advisors take pride in boutique service and levels of specialty that can be harder to find at the big wirehouses. In order to become household names, though, marketers need to reconcile the individuality that defines RIAs with far-reaching brand stories and organic growth campaigns that resonate on a national scale.
At Schwab IMPACT, we saw an advisor landscape ripe for assertive, consumer brand-like marketing. The firms that will succeed in the months to come will find ways to combine the impact and relevance of credibility marketing with “last-mile,” lead generation tactics that unlock consumer interest.
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