When Adding One Client at a Time No Longer Seems Like Enough

When Adding One Client at a Time No Longer Seems Like Enough

Advisors with their sights set beyond what organic growth delivers find greater opportunity in the independent space

Growth doesn’t happen by accident—it begins by knowing where you are today and where you want to be tomorrow. And if there’s one thing all advisors have in common – regardless of what stage they’re at in their career or what firm they’re currently with – it’s the desire to grow their business.

If you’re an advisor at a wirehouse, you’re likely limited to growing organically; that is, one client at a time. For some, it’s a strategy that allows them to achieve their goals by steadily increasing assets under management. But for those who really want to turbocharge their growth and take it up a few notches, organic growth alone is typically not enough. It’s often these advisors who are sparked by the notion of adding inorganic growth to the mix and feel the pull of independence.

A model that accentuates growth opportunities

In addition to offering greater freedom, flexibility and customization, the independent space delivers a business model where advisors can grow their client base and revenues faster than in any other part of the financial services industry. With less limitation around what an independent advisor can and cannot do, organic growth usually becomes accelerated while M&A offers a tremendous opportunity to grow inorganically.

There’s no shortage of stats that speak to the explosive growth independent advisors are experiencing, but numbers alone don’t tell the full story. So, for those on the “outside looking in” and wondering why independent advisory practices are growing faster than their employee-based advisor counterparts, we believe the following 4 key areas to be the reasons behind their success:

Mergers & Acquisitions

M&A in the independent space is heating up as enterprise-building advisors accelerate their growth with acquisitions of like-minded practices. According to a report from Echelon Partners, there were 168 M&A transactions in 2017, representing a 21.7% increase over the year prior. With an aging population of solo-practitioners who must solve for succession – coupled by smaller advisory firms who lack scale and simply can’t afford the increasing cost of doing business – there’s no shortage of acquisition opportunities for qualified buyers (specifically those with access to the capital and expertise to get a deal done). And in an environment where 1+1=3, all parties win as they have solved for the things that impact enterprise value most: Scale, infrastructure, and identifying a next gen.

Additional Client Services, Business Lines and Outside Referral Relationships

Whether it be by way of charging for additional services (such as financial planning, liability management, cash management, insurance and family office related services for larger clients) or by establishing referral and fee sharing arrangements with 3rd parties (including CPA’s, attorneys, commercial bankers and insurance professionals), the most successful independent firms create a culture of firm-wide growth. And given they control their P&L, independent advisors can customize their pricing structure to meet the needs of their clients.

Related: Three Key Elements of the Perfect Broker Dealer Partner Profile


Independent advisors have the autonomy to market their personal brand and are free, for example, to conduct seminars and host radio shows without a compliance department imposing limitations around what they can and cannot say. Rather than relying on a compliance department whose responsibility it is to manage to the lowest common denominator, these business owners leverage the guidance of a compliance specialist who’s personally aware of their brand and messaging, with the ability to provide prompt and seamless compliance review.

A customized and enhanced suite of technology

An RIA is not constrained by their firm’s technology platform, nor do they find themselves paying for services they don’t want or need. Instead, they can build a technology stack that best addresses the needs of their client base. In doing so, efficiency and productivity is enhanced, which ultimately leads to sustainable, long-term growth.

Regardless of what business model you occupy, a plan focused on growth typically requires multiple initiatives. And while independence offers advisors the opportunity to grow both organically and inorganically, it’s not for everyone. Start by asking yourself whether you can achieve the growth you want by remaining at your current firm. But for those who feel they have the entrepreneurial DNA to be business owners and take on the challenges and opportunities it represents, then perhaps it’s a matter of looking down the independent path to achieve your goals.

Deborah Aronson
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Like so many in the field, Deborah didn’t initially set her career sights on becoming a recruiter for financial advisors. In fact, as a Summa Cum Laude graduate from Boston ... Click for full bio

Most Read IRIS Articles of the Week: Feb 19-23

Most Read IRIS Articles of the Week: Feb 19-23

Here’s a look at the Top 11 Most Viewed Articles of the Week on IRIS.xyz, Feb 19-23, 2018

Click the headline to read the full article.  Enjoy!

1. Don’t Get Pinged by the Social Security Earnings Limit

I’d like to introduce you to Peggy. Born in 1956, Peggy will be 62 in 2018. She has worked in retail her whole life, the past twenty-five years spent in management. Peggy divorced from her husband 14 years ago, is still single and has no children. — Dana Anspach

2. We're Back to “Bad News is Good News” and “Good News is Great News”

This week the markets shrugged off last week’s fears and went back to the slow and steady melt up, despite economic news that looked likely to once again rock the boat. — Lenore Elle Hawkins

3. Q1 2018 Factor Views

Themes established in 2017 across a wide range of markets and factors continued to resonate through the fourth quarter. Economic growth was strong and supportive of equity markets across the globe, a range of volatility measures reached all-time lows, and business and consumer sentiment remained elevated. — Yazann Romahi and Garrett Norman

4. A Beneficial Basket of Commodities

Advisors and investors that feel they are hearing more and more about commodities and the corresponding exchange traded products in recent months are right. That is a natural result of dollar weakness and yes, the greenback is floundering again in 2018. — Tom Lydon

5. 3 Trends Shaping the Future of Asset Management

As the industry works to cope with new regulation, wades through an outpouring of new products, learns to satisfy investors’ shifting priorities and manages the active-passive debate, the viability of business units will be questioned, and at times radical measures will be taken. Peter Hopkins

6. 5 Ways Advisors Leave Money on the Table, and What to Do About It

My hope is that this article points out some opportunities for you to make more money and serve your clients at a higher level and that you decide to do something about it. — Bill Bachrach

7. The Market Has Gone Wild! Is It Time to Change Your Investment Strategy?

Whether the market is flying high or taunting your emotions with new lows and some bumpy volatility, here are four things every investor should keep in mind ... — Lauren Klein

8. How to Deepen Client Relations and Capture New Business Using Engaging Content

Why financial advisors NEED to understand much more clearly the power of good digital market. With tools like AdvisorStream, it’s easier than ever to get the content you need to drive leads and referrals today! — Kirk Lowe and Matt Halloran

9. Three Ways The Most Successful Gain Big Attention

How do some firms and ideas go from nowhere to everywhere in a few short months? All of a sudden a restaurant becomes popular, a gas station gains a cult following, or a Broadway show becomes too popular to get a ticket for years. — Maribeth Kuzmeski

10. Who Are the Hottest FinTech Firms and Influencers Around the World?

"Worldwide, $27.4 billion poured into fintech startups in 2017, Accenture reports, up 18% from 2016. With so much in play, it’s not surprising that 22 companies are new on this, the third edition of our list."  — Chris Skinner

11. The New Stock Market Normal Is Not What You Think!

Many sensational headlines have been written the past few weeks about market declines, but two things have increased for sure: the viewership and the ad revenues of financial media organizations — Preston McSwain​​​​​​​

Douglas Heikkinen
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IRIS Co-Founder and Producer of Perspective—a personal look at the industry, and notables who share what they’ve learned, regretted, won, lost and what continues ... Click for full bio