We had the pleasure of attending RIA Edge West in Marina del Rey in early October. It was a somewhat intimate, productive gathering of leaders and advisors within the RIA industry from around the country. While there were several interesting sessions, three themes that resonated were Navigating Change, Client Engagement and Future Proofing your RIA.
“When the pain is great enough, you will change”. This was perhaps the most memorable comment from the Navigating Change session, following a discussion about how most advisors don’t look at their practice as a business until it is time to sell. They don’t engage in what was referred to as the “constant hygiene” of their business. Another memorable comment was that “if you don’t like change, you will like irrelevance less”. Advisors were encouraged to constantly educate themselves about new ways to engage with clients.
"Client engagement is defined by the client, not by you” was another notable reminder during the Client Engagement discussion. Advisors were reminded that at the end of the day, clients remember most how you make them feel. How do advisors create “raving fans”? While seemingly evident, it was reinforced that clients want to feel “gotten” or “known”. As it relates to technology, a primary area of focus centered on using it to enhance the onboarding process. In addition, the recognition that most client contact is not done by advisors led to the discussion of whether teams are well trained. Throughout, a recurring theme was that much of client decision making comes back to family connections. As advisors, are we centering discussions on family, financial health, and alignment with client values? And do we appreciate that clients who reflect on their values make better decisions?
Future Proofing your RIA centered on the concept of creating scale, which was aptly described as the ability to grow without significantly increasing costs. There was the common mention of the need to have the people, process and technology in place to do this. Within these, people were viewed as perhaps the biggest capacity constraint given the stagnant nature of the advisor population (approximately 280,000). With these constraints, many firms refrain from growth and focus on servicing existing clients. As it relates to M&A, it was pointed out that many acquisitions are motivated by the need for talent to allow firms to scale, which explains why some of the largest firms are acquiring smaller firms; it’s not for their assets, but for their advisor capacity. When asked for a show of hands, almost everyone’s hand went up when asked if they are solicited 2 to 3X per week to be acquired. This led to a discussion about taking care of your people, creating visible career paths and the industry’s evolution toward partnership structures that incentivize people for the long haul. Importantly, there was a consensus on the importance of attracting young people to the profession through branded training programs, growth and career opportunities.
It is always beneficial to participate in these gatherings, which include lots of learning and networking. It was a pleasure to attend, listen and connect with so many great people.
