Traffic Jams to Growth: Four Barriers Slowing Down Your RIA

Traffic Jams to Growth: Four Barriers Slowing Down Your RIA

It’s said the only certainties in life are death and taxes. I’d like to add another to that list: Traffic jams. Unless you’ve spent your entire life in a picturesque Montana town, I’m guessing you’ve experienced at least one. If you’re from a larger metropolitan center, it’s probably much more frequent. Maybe it’s a temporary bottleneck due to construction. Or maybe it’s an ongoing issue: a short exit lane that keeps backing up.

Many RIA firms seem to struggle with traffic jams in their business plans. These firms dump money into sales or marketing, but still experience slow growth. Despite earnest efforts, there’s some barrier blocking the way.

If this story sounds like yours, you should consider if you have one of the following barriers in your way:

Four Barriers to Growth (and the Solution to Each)

1) Your firm has a technology bottleneck.

You might have outdated software and not even realize it. Technology evolves fast. Apple’s trend, for example, is to release a new iPhone every year to year-and-a-half.

Does it matter if your staff has the latest smartphone? Probably not. But not having integrated advisor software systems could be a problem. If you aren’t keeping up with modern times, your competitors might have the upper hand on you.

Integrated software could be the biggest issue for RIAs. You regularly compile financial planning reports, trading reports and portfolio accounting reports. If you aren’t using integrated software, your staff is probably wasting time duplicating efforts to get the same information into multiple systems.

For example, you might have to manually type clients’ addresses in each system. That means if a client moves, you update their address in your CRM, portfolio accounting platform, financial planning system, and so on. If that’s your situation, your software is outdated.

Solution: Schedule a review of your technology. This should be consistent: once every three months, once every six months, or once a year. Consider the technology you use. Does it make you spend too much time on clients, or does it provide you more opportunity? If the former is the case, then it’s time to schedule a technology review.

2) You don’t have the right staff in the right positions.

This could show itself in one of two situations.

1) High growth can make you understaffed in a hurry. If you’re bringing on clients faster than you can serve them, you’ll stunt your growth, because your service will drop below acceptable levels, and your staff will experience burnout.

2) You have the right number of people working for you, but they work in the wrong places. Team members who are in roles that don’t fit their skill sets aren’t able to serve clients most effectively.

Solution: Evaluate your staff and take their concerns and suggestions seriously. Play to their strengths and you’ll see your operational efficiency rise along with their productivity and attitude.

3) Your workflows and processes are inefficient.

The workflows you use every day have a huge effect on growth. You should have repeatable, clearly defined processes available to everyone on your staff.

But don’t just define them in your head. Write them down and share them with your staff. Ideally, you’re not sharing them on a post-it note, either. Automating your workflows is just as important as defining them.

If a client calls in with a move money request, you don’t want a new staff member hunting down the right steps to take, or worse, following their own idea of what needs to happen. No matter the action, it’s important that everyone follows the same routine processes.

Your CRM is probably the best place to create automated workflows that can streamline your work. These workflows should exist for every step of the customer lifecycle, from marketing to client feedback. That way, every client will have a consistent experience.

Solution: Decide which technology platform (like your CRM) is the best solution for automating your work, then write out your common processes and ensure you have repeatable, simple-to-follow processes in place to achieve maximum efficiency.

4) You aren’t able to identify what sets you apart from the crowd.

Perhaps your issue isn’t too many people to talk to. Maybe it’s too few. If you aren’t seeing new prospects asking to work with you, it’s time to review your marketing strategy.

First, do you have a marketing strategy? Relying solely on referrals is not a long-term or practical strategy for the vast majority of firms. You need to establish a way to reach out to new clients and inform them of how you can help them.

Part of reviewing your marketing strategy is identifying how you’re presenting your services. What makes you stand apart from other advisors? By asking yourself this question, you can define what separates you from other RIAs.

Solution: Know who you are and what you do. Capitalize on what makes you unique.

Are You Protected from Slow Growth?

Nothing can hurt a firm more than slow growth. Once you recognize the key issue holding you back, you’re able to move on to finding solutions to address it. And even if you’re growing at a consistent, manageable clip right now, it’s still an important part of your business plan to address future issues.

Guard against slowdowns in the future by regularly reviewing your technology, playing to your staff’s strengths, defining and automating your processes and workflows, and at your core, understand what you have to offer that makes your firm distinct.

Eric Clarke
Eric Clarke
Eric Clarke is the chief executive officer and founder of Orion Advisor Services, which develops solutions that improve advisors’ business operations and interactions with clients. The company’s current vision is to integrate its portfolio accounting system with CRM platforms to increase efficiencies for advisors. Mr. Clarke and his colleagues founded Orion’s predecessor company after they developed an off-the-shelf portfolio accounting system for advisors. Prior to starting Orion, Mr. Clarke served as chief operations officer for CLS Investments, an SEC–registered investment advisor. As an industry-recognized expert in portfolio accounting, Mr. Clarke has written articles that have appeared in Investment News, The Journal of Financial Planning, and others. He earned a bachelor’s degree in accounting from Brigham Young University and a master of business administration degree from the University of Utah.

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