Category

Practice Management

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March 10, 2021

2021 RIA Practice Management Insights Conference Recap

We want to thank everyone who attended or participated in our inaugural RIA Practice Management Insights conference last week.  We set out last year to create a conference geared towards the back-of-house issues that are critical to success, but don’t get as much attention as themes like M&A and consolidation at many conferences.  To that end, we were fortunate to be able to compile a speaker list full of well-known experts on various practice management topics like firm culture, marketing, managing your tech stack, and more.

March 1, 2021

Conference Speakers Will Shed Light on a New Day in the RIA Industry

Catching Up with the Future at the RIA Practice Management Insights Conference

The deficiency in the growth story of many RIAs is they employed lots of people to work “in” the business, but not enough to work “on” the business. Strategic thinking about practice management is a necessity in an industry that has been catapulted into the future. This post discusses why we put together the RIA Practice Management Insights conference.

February 22, 2021

Failing to Plan Is Planning to Fail

Just Because Everyone Else Is Doing It, Doesn’t Mean You Should Ignore Succession Planning

Next week, during the inaugural RIA Practice Management Insights conference, we will set aside some time to answer your questions about succession planning. We’ll cover some of these topics in more detail next week, but this post offers a preview of our thinking about various succession planning (and exit) options.

February 16, 2021

How RIA Owners Can Rethink Compensation

Money Talks

Salary and bonus discussions are some of the most stressful conversations business owners have each year, and RIA principals are no exception. Since personnel costs are by far the largest expense item on an RIA’s income statement, it is understandable that these principals frequently question (and are questioned about) their compensation decisions. While there is no one-size-fits-all formula for compensation, we have discovered three ways to ease some of the anxiety around these discussions.

February 8, 2021

Seven Considerations for Your RIA’s Buy-Sell Agreement

Working on your RIA’s buy-sell agreement may seem like a distraction, but the distraction is minor compared to the disputes that can occur if your agreement isn’t structured appropriately.  Crafting an agreement that functions well is a relatively easy step to promote the long-term continuity of ownership of your firm, which ultimately provides the best economic opportunity for you and your partners, your employees, and your clients.

If you haven’t looked at your RIA’s buy-sell agreement in a while, we recommend dusting it off and reading it in conjunction with the discussion in this post.

February 4, 2021

Being Human: The Secret to Authentic Advisor Videos

Guest Post by Megan Carpenter of FiComm Partners

Over the years, we have repeatedly said that the wealth management side of the investment management business is healthier than the asset management side.  Unlike asset managers whose clients are likely to jump ship after a few bad quarters, wealth management is based on client relationships and a manager’s ability to inspire confidence in his or her clients.   

Wealth managers spent their careers perfecting in-person communications to connect with clients.  2020’s transition to WFH made most of these communications virtual.  In this guest post, Megan Carpenter provides tips to improve your Zoom communication skills with clients.

January 7, 2021

Announcing the Inaugural RIA Practice Management Insights Conference

Professionalizing the Business of Investment Management

We are excited to announce that we are putting together a virtual conference for RIAs that is focused entirely on operational issues – from staffing to branding to technology to culture – issues that are as easy to ignore as they are vital to success. The RIA Practice Management Insights conference will be a two half-day, virtual conference held on March 3 and 4.

December 14, 2020

New York at Risk of Losing RIA Hub Status

Goldman’s Recent Plans to Move Its Asset Management Division to South Florida, a Possible a Sign of More to Come for the Empire State

This week’s post analyzes recent RIA moves out of the Big Apple and what it could mean for your firm.

June 9, 2020 Wealth Management

Pandemic Practice Management Opportunities

RIAs are Taking Advantage of this Time to Revisit Shareholder Agreements

You’ll probably find that the “downtime” afforded by working remotely and traveling less is a perfect time to clean up some practice management issues, including your buy-sell agreement. So pull your shareholder agreement out and compare it to our whitepaper.

May 26, 2020

The Family Office

Managing Family Wealth Since 27 BC

Educating your family about how your wealth and/or family business is managed is essential for the preservation of your family legacy. In this week’s post, we discuss family offices. Private investment office…  Family business advisor… Single-family office… The name differs and the definition varies greatly depending on whom you ask. But the concept remains the same. Wealthy families often seek assistance to manage their accumulated wealth, organize family affairs, and preserve capital for future generations.

February 17, 2020 Current Events

Q1 2020 Call Reports

M&A Opportunities a Focus Point for Public Companies

In this post we take a look at some of the earnings commentary from Q1 2020 call reports.

December 9, 2019

Debt Financing for RIAs

How to Finance an Ownership Transition

As noted in a recent post, there are many viable options for RIA principals when it comes to succession planning.  One way to transition ownership while maintaining independence is to sell internally to key staff members.  The most obvious roadblock when planning for internal succession is pricing.  But once you establish a price, how does the next generation pay?  An internal transition of ownership typically requires debt and/or seller financing as it’s unlikely that the next generation is able or willing to purchase 100% ownership in a matter of months.  In this post, we consider the expanding options for RIAs seeking debt financing and the typical terms they can expect.

November 11, 2019 Current Events

Q3 2019 Call Reports

Differentiated Strategies of Asset Managers, Wealth Managers, and RIA Consolidators

During Q3 2019, most classes of RIA stocks underperformed major equity markets, which are having their best year, so far at least, in more than two decades. In general, base fees for RIAs were up due to higher average AUM (driven by market growth), however, each sector experienced unique challenges. As we do every quarter, we take a look at some of the earnings commentary from investment management pacesetters to scope out the dominate trends.

October 28, 2019 Wealth Management

WeInvest?

The Best Business Model in the RIA Industry Depends Not on Who You Ask, but Who’s Asking

Earlier this month we had the pleasure of participating in a panel discussion on the value of wealth management firms in a transaction setting for the CFA Society of New York.  In conversation after the event, one of the audience members asked me what I thought was the most successful business model to follow in the wealth management space.  It’s a question we hear fairly often, and I try to avoid punting on the answer and saying “it depends.”  In reality, though, it does depend.

October 8, 2019

Transitioning Your Business to the Next Generation of Leadership

Successful Succession for RIAs

Continuing with our succession series, this week’s focus is on internal transitions.  If you’ve ever wondered why there aren’t more transactions in the RIA space, it’s largely because most of these businesses ultimately transition their ownership internally to younger partners at the firm.  These deals typically don’t get reported, so you probably don’t hear about most of them.  Still, it’s the most common type of transaction for investment management firms and probably something that’s crossed your mind if you’re approaching retirement.

October 2, 2019

Planning to Succeed

Succession is as often discussed as it is misunderstood.  While many practice management issues revolve around industry expectations, regulations, client expectations, and basic economics, succession involves all of those things plus personality, culture, and skill sets.  And while much has been written about succession in the RIA industry, we’ve seen plenty of topics get little, if any attention.  This post is dedicated to some of the latter.

September 16, 2019

Selling Your RIA to a Consolidator  

Successful Succession for RIAs

As we explained in a recent post, there are many viable exit options for RIA principals when it comes to succession planning.  In this post, we will review some of the considerations when partnering with an RIA consolidator. 

September 9, 2019

Partnering with a Minority Financial Investor

Successful Succession for RIAs

As we explained in a recent post, there are many viable exit options for RIA principals when it comes to succession planning. In this post we will review some considerations of partnering with a minority financial investor to achieve a successful transition of ownership.

September 3, 2019

Posturing for a Successful Succession

A recent Schwab survey asked RIA principals to rank their firm’s top priorities in the coming year.  We were disappointed but not surprised to discover that developing a succession plan was dead last. If you’re a founding partner or selling principal, you have a lot of exit options, and it’s never too soon to start thinking about succession planning. We’ll outline these options in this post and expound upon them in more detail later in the series.

August 20, 2019

How Does Your RIA Measure Up?

Schwab’s 2019 Benchmarking Study Offers Insights Into the RIA Industry

Schwab recently released its 2019 RIA Benchmarking Study.  The survey contains responses from over 1,300 RIAs that custody their assets at Schwab to questions about firm operating performance, strategy, and practice management.  The survey is a great resource for RIA principals to see how their firm’s performance and direction measure up against the average firm.  We’ve highlighted some of the key results from the study in this week’s post.

July 15, 2019 Trust Companies

Are Trust Companies Changing for the Better?

Trust Company Sector Update

Trust law has evolved over time, most recently with modern trust laws in the 1980s and 90s established by certain states such as Delaware, Nevada, and South Dakota. Other states, such as Tennessee, have developed compelling trust statutes in more recent years. Just as trust law has changed with the regulatory environment, trust companies are changing to meet clients’ evolving needs.

July 9, 2019 Transactions

Unsolicited Offers for Your RIA

Is the First Bid the Best?

The primary danger of an unsolicited offer is that it lures potential sellers into thinking the deal is done and the process will be easy.  As with most things in life, if something looks too good to be true, it usually is.

June 10, 2019

The Ultimate Investment Vehicle

Is the Value of your RIA More a Function of Risk or Growth?

On paper, the RIA model is a value generating machine: a reliable stream of distributable cash flow resulting from sticky, recurring revenues and growing effortlessly with the investment returns available in a diversifiable variety of financial markets. The reality, of course, is more nuanced.

May 20, 2019 Industry Trends Transactions

What We’re Reading on the RIA Industry

M&A and Practice Management

Much of the sector’s recent press has focused on the current M&A environment as well as practice management issues for RIA firms, so we’ve highlighted some of the more salient pieces on these topics and a few others that are making news in the investment management industry.