Sweet spot: How the RIA model helps serve clients

RIAs are gaining market share because the RIA model allows firms to embrace the strategies necessary to serve clients.

Studies point to consistent growth for registered investment advisory firms and the number of investors who choose to work with RIAs. We love being an RIA and partnering with other independent advisers and have found the RIA space to be the best structure for top client-focused advisers.

We are committed to the independent advisory space because it allows us the best success for our clients. It is the optimal place for the most talented financial advisers to operate as fiduciaries and serve their clients with detailed plans and thoughtful advice.

RIAs are gaining market share because the RIA model allows firms to embrace the strategies necessary to serve clients. In being independent of structural conflicts of interest and having access to open investment architecture, RIAs can offer a broad and deep solution set for clients.

RIA success is attributed to three things — recruiting quality and diverse talent, achieving sufficient scale, and maintaining and developing our culture. These areas are critical to our business model.

DIVERSE TALENT

Unlike the manufacturing sector, which requires investments in factories and physical infrastructure, RIAs invest in recruiting, retaining, and developing passionate and knowledgeable professionals. Instead of widgets, we produce expert advice based on trust to help clients achieve their goals.

We believe future success will be shaped by human interaction and the inclusion of talent from diverse backgrounds. Like our clients, there is no “one size fits all” concerning our staff. Aggregating diverse talent allows a collaborative environment that delivers creative solutions. We have advisers on our team with nontraditional backgrounds, including a former business executive from IBM, a neuroscience researcher and an estate planning attorney, who complement and support our organization and are in a unique position to serve clients. Moving forward, we remain committed to including multidimensional diversity.

SCALE

A recent study found that some advisers changed roles as a result of a lack of the technological tools needed to serve clients. As clients demand a range of solutions and services, scale is increasingly important in enabling investments in process and technology advancements. Technology is integral to keep and develop staff, creating room for human interaction.

Scale allows firms to build systems with tailored services and faster, more secure, and more accurate outcomes not tied to legacy systems — this includes sharing more timely information with advisers. Client dashboards and real-time business intelligence are critical to receiving up-to-date information about clients and their business. This is not backward-looking information; it includes predictive data that help advisers anticipate client issues, gain clarity on their performance and better serve their clients.

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Scale is also crucial in operating and maintain the firm’s culture. Dedicated resources help advisers get the leverage necessary to grow their business, including staff members who provide marketing, operations, talent management, and specialized trust and estate expertise that smaller firms cannot offer. We have multiple staff members whose entire job is to help advisers make the most of our technology.

CULTURE

A unified culture grounded in our commitment to clients is significant to our RIA model and is the foundation of our business. There is purpose in our work, and our culture reflects the values that we live each day.

The best advisers demand a client service culture imbued with integrity. Advisers join us to be surrounded by people who will always do the right thing. A Schwab study found that 75% of high-net-worth investors want their advisers to make decisions that are only in their best interest. We know our clients desire that too. As an RIA and a fiduciary, we are seated on the same side of the table as our clients.

Our culture is about collaboration. The best advisers seek to share ideas and work together to deliver the best solutions. They do this without boundaries and with nimble flexibility to deliver optimal service.

Ultimately, we need to create and maintain an innovative ecosystem that adapts to client needs. We achieve that best in an RIA model committed to building diverse teams, investing in scale, and maintaining our unique culture.

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Mike LaMena is CEO of Wealthspire.