The RIA industry is at an exciting inflection point characterized by consistent market growth and early innings of consolidation. RIAs that are well-run and properly capitalized are best positioned to build enterprise value, both organically and inorganically.

As we’ve explored partnerships with Registered Investment Advisors to capitalize on compelling industry dynamics [See previous GrowthBit], LLR has seen common “Platform model” characteristics from RIAs that are prioritizing sustainable enterprise value. Here are some of those characteristics and the potential resulting benefits to RIAs:

Dedicated Executive Team (e.g., CEO, CFO, CIO, CCO)

Allows RIAs to have a clear strategic vision and effective decision-making processes without interfering with advisor-client relationships. With focused leadership and specialized expertise, RIAs can better identify and execute potential growth opportunities, streamline operations and navigate compliance standards.

Comprehensive Service Offering (e.g., Tax and Estate Planning, Investment Management, Accounting)

Improves client retention by allowing advisor teams to develop more holistic financial plans with tailored strategies to help optimize wealth preservation and potential growth.

Best-in-Class Technology

Enables RIAs to improve operational efficiencies and enhance client experience. Integrating tools for financial planning, investment analytics and client communication, for example, can lead to increased advisory productivity as well as more personalized services and planning strategies for clients.

Advisor Teams Owning Client Relationships (vs. Individual Advisors)

Facilitates better coverage of clients’ needs through consistent service across the firm and reduces the risk of client attrition if a single advisor leaves the firm.

Mature, Consistent Advisor Compensation Model

Aligns advisors and helps promote behavior that is in the best interest of the RIA and its clients. Market compensation rates allow firms to retain talent and benefit from a profitable business model which contributes to enterprise value for RIAs.

Distributed Employee & Advisor Ownership

Fosters a culture of ownership and collaboration, aligns employee interests to focus on the long-term success of the firm, and promotes employee and advisor retention.

 

Partnering to Pursue an RIA Platform Growth Model

LLR recently engaged Neal Simon, former CEO of Bronfman Rothschild and Highline Wealth Management, as a Senior Operating Advisor to help our team identify, evaluate and manage new investment opportunities with RIAs and service providers to the wealth management industry. We asked Neal for his view on the space:

“The RIA industry is at an exciting inflection point characterized by consistent market growth and early innings of consolidation. RIAs that are well-run and properly capitalized are best positioned to build enterprise value, both organically and inorganically.”

– Neal Simon, Senior Operating Advisor at LLR and former CEO of Bronfman Rothschild and Highline Wealth Management.

LLR remains focused on partnering with RIAs looking to capitalize on attractive industry dynamics and achieve the RIA platform model benefits outlined here. If you’re an RIA or an intermediary working in the space, let’s continue the conversation around this RIA growth model. Email me at sryder@llrpartners.com.

Learn more about the LLR team, relevant investments and our focus on the RIA platform model.