Key Takeaways

• Momentum isn’t about growth in good markets – it’s about building systems that sustain performance when conditions tighten.
• RIAs that understand the true sources of their success, fortify margins, and modernize ownership structures will be best positioned for 2025–26.
• Long-term industry tailwinds still favor independent firms, but the benefits will increasingly accrue to those prepared for volatility, demographic shifts, and referral disruption.

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Nobody wins the 24 Hours of Le Mans because they ran the fastest lap. They win because they keep the car intact – through fog, rain, traffic, driver changes, and the 3 a.m. stretch where everything feels like it’s coming apart. Speed helps, but stamina, balance, and preparation win the race.

The same is true for investment management firms. Strong markets and rising AUM can make any firm feel quick on the straightaways. But momentum, the kind that compounds over years, depends on the systems, people, and discipline that keep a firm performing when conditions tighten.

As the industry enters 2026 with both strong tailwinds and fresh headwinds, now is the time to turn good years into lasting advantage. Here are five ways to do it.

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1. Look Beneath the Surface of Growth

AUM is up. Revenue is up. Margins are strong. But headline numbers can flatter and distort.

Firms that want durable momentum need to know why they’re succeeding:

• How much of growth is market beta versus true organic inflows?
• Are we gaining relationships, or are markets masking quiet attrition?
• Has our realized fee schedule slipped due to mix, negotiation, or discounting?
• How dependent are we on custodial referral channels now tightening up?

With custodians raising minimums and demographic shifts influencing both clients and advisors, momentum comes from understanding the quality of growth – not just the magnitude of it.

2. Reevaluate Whether Your Value Proposition Still Fits Today’s Market

Client expectations are evolving faster than many firms’ service models. Wealthy families increasingly want integrated planning, tax strategy, and higher-touch coordination – not just portfolio management. Meanwhile, fee sensitivity is rising.

This doesn’t mean every RIA needs to build a multi-family office. It does mean firms must sharpen what truly differentiates them.

Ask yourselves:

• Which parts of our service offering actually drive retention?
• Where do clients perceive unique value versus interchangeable value?
• Are we adding services that strengthen loyalty or ones that dilute margin?
• Are we positioning ourselves for the clients we want five years from now – not five years ago?

Momentum favors firms whose value proposition is not just broad but aligned with today’s expectations.

3. Stress-Test Margins Before the Market Does It for You

The last decade trained many RIAs to view 25–35% margins as normal. But inflation, wage pressure, higher rates, and correlated market drawdowns challenge this assumption.

A meaningful stress test should model:

• A 15–25 % decline in AUM
• Rising compensation for talent in a chronically tight labor market
• Higher interest costs for firms carrying acquisition debt
• Fee compression or slower inflows during volatile markets

Margins aren’t simply a measure of profitability; they are the firm’s shock absorbers. When the environment shifts, the firms that maintain momentum are the ones that have already built resilience into their P&L, not the ones scrambling to cut costs when things get rough.

4. Align Ownership With the Firm You’re Becoming

Momentum relies heavily on whether the ownership structure supports, or inhibits, long-term strategy.

In many firms, ownership has not kept pace with growth, generational change, or the expectations of rising leaders. Concentrated cap tables can constrain development. Aging founders without a clear succession path can slow decision-making. And elevated valuations make internal transitions harder without planning.

Meanwhile, external buyers remain active but increasingly selective, shifting more deal value into earnouts and contingent terms.

Questions every firm should address now:

• Does our ownership model attract and retain the leaders we need?
• Are we proactively building a pathway for internal succession?
• Would we be ready – strategically and operationally – if we needed liquidity?
• Does our ownership structure reinforce or hinder our business model?

Momentum comes from alignment: leadership, ownership, and strategy pulling in the same direction.

5. Lean Into the Long-Term Tailwinds but Don’t Assume They’ll Save You

Despite near-term volatility, the long-term fundamentals remain remarkably strong for well-run RIAs. The largest cohort of American retirees in history is entering the advice ecosystem. Assets continue migrating to independence. And over time, markets remain upward drifting despite dramatic pauses.

But these tailwinds increasingly favor firms that have already:

• Built repeatable organic growth engines
• Strengthened profitability through discipline
• Prepared leadership and ownership for generational transition
• Developed a clear, compelling value proposition
• Invested in talent capable of sustaining client relationships

Momentum is not a gift the market bestows, it’s something firms manufacture through preparation.

The Checkered Flag

It’s been a great year for the investment management industry – let’s keep it going.

Le Mans winners don’t celebrate because they were fastest on Saturday afternoon. They celebrate because they’re still standing on Sunday. Along the way, they avoided unnecessary risks, preserved their equipment, and made decisions that favored endurance over excitement.

RIAs face the same test. Strong years come and go. What matters is whether your firm is engineered – financially, strategically, and culturally – to stay competitive when the course turns rough.

Momentum isn’t speed. It’s staying power.