Knowledge and Insight
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Smart Recruiting Can Secure Your Succession
Added on November 2013 in Plan for the Future
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Summary: Industry observers say the extent to which independent advice firms can keep stealing market share from big-name rivals like Merrill Lynch and Morgan Stanley depends on their ability to transition to next-generation owners. Extending an established trend, indie RIA assets grew by 19% last year, while AUM at the four biggest brokerages were essentially flat, according to Cerulli Associates. Bigger RIAs can merge with approximate equals or acquire smaller firms to see them into the middle of the century. But for smaller RIAs, the best way forward may lie in smart recruiting.
Buying a Practice? 5 Important Valuation Questions
Added on November 2013 in Plan for the Future
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Summary: Practice acquisition (acquiring a retiring advisor's practice) is an incredibly lucrative way to grow your business exponentially, and as advisors age, there will be ample opportunity for younger advisors to acquire practices. In the next 10-15 years, there's going to be a glut of “for sale by owner” practices, but the simple fact is that they are not going to be worth the multiples that are being thrown around now. Here are five things to ask the selling advisor and the appraiser before you buy a practice.
Long the underdogs, female advisors are actually winning in two important categories, a study based on $3.5 trillion of AUM shows
Added on November 2013 in Thought Leadership
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Summary: Despite finding themselves in a sometimes inhospitable male-dominated profession, female advisors are capturing the lion’s share of the nation’s increasingly higher earners — women — and winning a higher average account overall.Just 12% of the investment advisory workforce comprises women, but the typical female advisor counts more women as clients and a higher average account in such households than their male counterparts, according to a new study by PriceMetrix Inc
The Fatal Succession Planning Mistake
Added on November 2013 in Plan for the Future
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Summary: The scope of the succession problem in the independent advisory industry is well-documented. Baby boom generation of advisory firm owners are on the brink of retiring over the next 10 years or so, with some sources estimating that as many as 50,000 of their firms—and $4 trillion in client assets—will be changing hands or closing their doors. The vast majority of the owners of these firms would prefer to transition ownership to their junior partners in an internal succession. Yet very few have taken steps to make this happen, even at this late date.
As RIAs grow, more hiring chief operating officers to manage their firms
Added on November 2013 in Manage Your Practice
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Summary: David Wright is facing a pleasant predicament. Since 2008, assets under management at Sierra Investment Management Inc., the registered investment adviser he co-founded in 1987, have more than tripled to $1.75 billion, and head count has nearly doubled to 20, so Mr. Wright has been forced to look for extra help managing the business. Mr. Wright is part of a growing number of RIAs on the hunt for a chief operating officer to run the day-to-day business, giving advisers time to focus on prospecting for clients and managing portfolios.
