The Case for the Mid-size RIA

Few decisions are as important to a financial advisor’s business as their choice of RIA. While every advisor has their own criteria for a desirable RIA partner, finding the right fit for your firm is an important process. Thorough research is essential – not only do you find out who fits you best, but you discover what criteria fits you best. For many advisors, their search starts with the larger brand names in the space. Today though, we are diving one layer deeper and exploring the mid-size market.

Understanding the Purpose of the Midsize RIA Market

A larger RIA is like a cruise ship – it’s built to accommodate thousands of passengers. They standardize the experience to make it scalable. What it accomplishes in the name capacity, it sacrifices in personalization and maneuverability. With thousands of advisors on their platforms, larger RIAs need to address the most common needs of their advisor base. They’re efficient and standardized, but they’re more restrictive and slow-moving.

Midsize RIAs are like smaller vessels. They’re not built for thousands of passengers, and that limitation is also their strength. Because the ship is intentionally built for a smaller subset of passengers, the experience can be more personalized. You are allowed more control of the direction you take your business, growing more in line with your vision. In principle, the midsize RIA segment exists intentionally as an alternative to the existing standardization of larger RIAs.

The midsize market presents a unique alternative in philosophy. Where standardization exists, midsize RIAs exist to pursue more specialized solutions. While they do provide the common needs an RIA requires, they also have the flexibility to develop more personalized solutions.

An Example of Midsize RIA Innovation: Investment Management

We recently published a story following the RIA journey of Wayne Wagner Jr., ChFC, president of Vizionary Wealth Management. Wayne’s exhaustive search for a new RIA included 15 months and interviews with over 80 different RIAs, sifting through a remarkable amount of overlap. He was determined to find a partner committed to innovating the advisor business model and building tools to accomplish his vision.

As he came across WealthPlan Group, he found both a culture of innovation and a resource that met a critical need he had. As a single advisor practice managing just shy of $300M in high income households, he needed an innovative solution to improve his ability to manage trading at scale. Under WealthPlan Group, he found an investment management solution that not only improved his bandwidth, but saved him an estimated $450,000 a year in staff productivity.

Read Wayne’s Full Case Study to See How

Addressing the Stability Question for Midsize RIAs

In discussing the case for midsize RIAs, we need to ask important questions around stability and longevity. After all, one of the main appeals of the larger RIA options is their stability. A cruise ship might not be maneuverable, but you’re less worried about if it will capsize without warning. This is a serious question for the midsize market. Not every midsize RIA has a good answer to this question, but some can answer confidently. When dealing with the midsize segment, this is a critical question around leadership.

The Existential Aspect

The first aspect of this question is existential – how confident are you that the RIA in front of you has a future that provides you plenty of runway to grow? If the leadership doesn’t have a long term view of their RIA’s potential, there’s significant cause for concern. One example an advisor offered described an RIA headed by a man in his 60s who was within 10 years of retirement. He was building the RIA with significant recruiting packages to bolster the AUM of his group in order to flip the firm. As Wayne listened, he heard a lack of long-term stability for his business at that RIA.

The answer to this question is best found in the structure of the leadership. One of the key principles to look for is in multi-generational leadership. Yes, you want industry veterans at the helm, but you also want to know that there is a plan in place to keep a familiar place at the wheel to keep your future trajectory clear.

The Culture Aspect

The other aspect of this question has to do with continuity of culture within an RIA. When you choose an RIA, it’s usually not just because of the features they’re offering. It usually has to do with their outlook on being an advisor – they need to resonate with your passion to offer a strong partnership. Whether that is a specific demographic of clients or a commitment to innovation, you want to know that what attracted you to the RIA has a future beyond the next five years.

The answer to this question also lies in the leadership structure. An RIA is best run by a collaborative leadership team. If the culture of the community is built on a single leader, it can change with the tide. You want multiple voices that share the common vision to preserve the future culture of the organization.

A Midsize RIA Built for Innovation and Stability

At WealthPlan Group, we are committed to providing our advisors with a growth-friendly relationship. From tailored business solutions to an innovation-rich environment, we invite you to experience what it’s like when your RIA builds around you and your future.

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