Pick on Someone Your Own Size

The financial press has been filled with articles about RIA transactions.  I’m happy for the industry but I think we need evaluate how we got here.  My blog this week will examine why RIAs are growing and selling at an unprecedented pace,  One of my RIA friends observed that we got here by positioning ourselves versus the ills of Wall Street.  I’m not as PC as my friend so I will take a hard look at how RIAs need to pick on somebody there own size.  RIAs have a stellar reputation of always doing the right thing for there clients.  We don’t need to be a bully to grow and ultimately sell our practice.  Here are some ways we are picking on our competition.

Wall Street

Clients and their advisors know that Wall Street has many conflicts of interest.  Selling against that fact seems to have run its course.  The breakaway advisors I follow after they realize that a fiduciary standard does NOT pay well start to adopt Wall Street conflicts to narrow the pay gap.  My April 2016 article is worth  re-reading.  Running away from the Wall Street bully will initially feel good, But... We ALL made too much money on Wall Street and the sooner we can purge this from our memory and start picking on someone our own size the better.


Unfortunately the Focus Financial IPO was not a savior for the independent RIA industry.  The recent IPO of AssetMark could be our savior.  The reason AssetMark is performing significantly better than Focus is their business model as a partner for RIAs rather than a competitor.  AssteMark isn’t fighting RIAs and their stock price and the 6000+ RIA clients proves that being a partner is a better approach than being a bully.

Your Firm

The Fiduciary standard has been good to the Independent RIA industry but we need to find another play.  My hope is our next play will include client friendly Fintech.  Our clients trust us and have realized that active management hasn’t worked.  Rather than picking on Wall Street and active managers I hope we can  channel our energy into a new way to make our client’s life easier.  Fintech should help and my only concern is that the iPhone won’t drag down Fintech solutions with it.  Our client friendly solutions should win the day and be our Apple Watch.

The next stage of RIA growth will require that we create solutions to help make our clients’ lives easier.  The money will follow but using the Wall Street play to pick on smaller people will only get us a detention.  Focus on making your clients' life easier. It will keep us all out of the principal’s office and make us happier.


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