Exploring the RIA Phenomenon Called 'The Buyer's Bias'

Mary Ann Buchanan and Kathleen Asack | WealthManagement.com, July 2015

Summary: There is an inescapable truth that exists in the RIA community. The fact is, an overwhelming majority of advisory firms want to buy another firm. Their desire to grow inorganically is the same, whether they have $2 billion, $200 million or $25 million of assets under management. Where does this desire come from? We like to refer to it as the “Buyer’s Bias,” which is comprised of a series of factors that support the notion that along with being human, advisors are vulnerable to human biases.

[Each year, we analyze the aggregated data of completed subscriber profiles within the RIA Match database to measure goals and trends within the marketplace.] This movement between RIAs is a sign of the high demand for experienced talent against the backdrop of the talent shortage and the desire for inorganic growth as the challenges of organic growth bear down upon advisory firms.."