{"id":9856,"date":"2022-04-07T08:51:03","date_gmt":"2022-04-07T13:51:03","guid":{"rendered":"https:\/\/rixtrema.com\/blog\/?p=9856"},"modified":"2022-04-07T08:51:08","modified_gmt":"2022-04-07T13:51:08","slug":"the-ria-industry-vs-financial-advisors","status":"publish","type":"post","link":"https:\/\/rixtrema.com\/blog\/the-ria-industry-vs-financial-advisors\/","title":{"rendered":"The RIA Industry vs Financial Advisors"},"content":{"rendered":"\n<div style=\"height:40px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<ul class=\"wp-block-list\"><li><strong><a href=\"#rias-are-trending\">RIAs Are Trending<\/a><\/strong><\/li><li><strong><a href=\"#rias-make-gains\">RIAs Make Gains<\/a><\/strong><\/li><li><strong><a href=\"#financial-advice-industry-on-public-markets\">Financial Advice Industry on Public Markets<\/a><\/strong><\/li><li><strong><a href=\"#major-challenges-for-advisors\">Major Challenges for Advisors<\/a><\/strong><\/li><li><strong><a href=\"#the-action-plan\">The Action Plan<\/a><\/strong><\/li><\/ul>\n\n\n\n<div style=\"height:40px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h2><strong><a id=\"rias-are-trending\"><\/a>RIAs Are Trending<\/strong><\/h2>\n<p><em>\u00a0<\/em><\/p>\n<p>We can see now that 2021 was a very good year\u00a0<a href=\"https:\/\/www.investmentnews.com\/adviser-recruiting-stays-cold-while-breakaway-rias-heat-up-213819\">for so-called breakaway financial advisors<\/a>\u00a0\u2014 those who leave Wall Street wirehouses like Merrill Lynch and Morgan Stanley and flock to registered investment advisors, where they stand to earn a greater share of their revenue and enjoy greater autonomy than they would working at a big bank.<\/p>\n<p>Wall Street was aware of this trend for years, pointing to the fact that the Big Four wirehouses, which also include Wells Fargo Advisors and UBS, have the wealthiest clients and the financial advisors who generate\u00a0<a href=\"https:\/\/www.investmentnews.com\/galleries\/average-production-of-financial-advisers\/image\/1\">the greatest amount of revenue<\/a>\u00a0in the industry.<\/p>\n<p>As the financial advice industry attempts to emerge from two years of Covid-19 and return to the office, the numbers on where advisors are choosing to work show there\u2019s little room for doubt that the wirehouses are losing talent.<\/p>\n<p>\u00a0<\/p>\n<p><a href=\"https:\/\/rixtrema.com\/blog\/wp-content\/uploads\/2022\/04\/11.jpg\" data-rel=\"lightbox-image-0\" data-rl_title=\"\" data-rl_caption=\"\" title=\"\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-9857 size-large\" src=\"https:\/\/rixtrema.com\/blog\/wp-content\/uploads\/2022\/04\/11-1024x612.jpg\" alt=\"\" width=\"960\" height=\"574\" srcset=\"https:\/\/rixtrema.com\/blog\/wp-content\/uploads\/2022\/04\/11-1024x612.jpg 1024w, https:\/\/rixtrema.com\/blog\/wp-content\/uploads\/2022\/04\/11-300x179.jpg 300w, https:\/\/rixtrema.com\/blog\/wp-content\/uploads\/2022\/04\/11-768x459.jpg 768w, https:\/\/rixtrema.com\/blog\/wp-content\/uploads\/2022\/04\/11-500x299.jpg 500w, https:\/\/rixtrema.com\/blog\/wp-content\/uploads\/2022\/04\/11-800x478.jpg 800w, https:\/\/rixtrema.com\/blog\/wp-content\/uploads\/2022\/04\/11.jpg 1103w\" sizes=\"auto, (max-width: 960px) 100vw, 960px\" \/><\/a><\/p>\n<p>\u00a0<\/p>\n<p><span lang=\"EN-US\">Wall Street firms are pouring money into technology \u2014 think Merrill Edge \u2014 and acquisitions\u2014 see Morgan Stanley\u2019s recent purchase of ETrade. But it\u2019s the RIAs that are winning the battle for experienced financial advisors. And that doesn\u2019t seem likely to change any time soon.<a id=\"rias-make-gains\"><\/a><\/span><\/p>\n<p>\u00a0<\/p>\n<h2 style=\"background: white; text-align: left;\" align=\"center\"><strong><span lang=\"EN-US\" style=\"font-size: 18.0pt; line-height: 107%; color: black;\">RIAs Make Gains<\/span><\/strong><\/h2>\n<p>\u00a0<\/p>\n<p><a href=\"https:\/\/www.investmentnews.com\/pursuing-what-matters-most-when-you-go-independent-advisers-217354\">According to InvestmentNews Research<\/a>, the RIA channel saw a net gain of 1,530 financial advisors in 2021, while the wirehouses had a net loss of 2,065. Of course, not all wirehouse advisors jump to an RIA; some retire and hand off their book of clients to the firm, often for a handsome fee. The RIA channel also boosts its numbers by scooping up advisors from independent broker-dealers and regional firms, although the target for many RIAs is the wirehouse advisors with the biggest production.<\/p>\n<p>RIAs also have the wind at their backs in the fight for financial advisor talent. Last year\u2019s RIA net gain was 69.4% more than in 2016, when RIAs had a net gain of 903 advisors, according to Research.<\/p>\n<p>And the <a href=\"https:\/\/rixtrema.com\/blog\/how-rias-are-attracting-aum-with-technology\/\">RIA industry<\/a> is beginning to look a lot like Wall Street, making it even more attractive and familiar to financial advisors leaving the big firms. For instance, private equity money has flooded the RIA industry, increasing the potential valuation of an RIA with $1 billion or more in assets under management.<a id=\"financial-advice-industry-on-public-markets\"><\/a><\/p>\n<p>\u00a0<\/p>\n<h2><strong>Financial Advice Industry on Public Markets<\/strong><\/h2>\n<p>\u00a0<\/p>\n<p>The public markets are another reason why <a href=\"https:\/\/rixtrema.com\/blog\/how-small-rias-can-keep-up-with-fin-services-corporations\/\">RIAs are attracting financial advisors<\/a>.<\/p>\n<p>Dynasty Financial Partners, an early proponent and gateway tool of the breakaway partner model, filed for an IPO in January, reporting 47% year-over-year growth in fee-based revenue through September, according to\u00a0a filing with the Securities and Exchange Commission. It\u2019s seeking to raise $100 million.<\/p>\n<p>Also in September, two RIAs and a special purpose acquisition company said they were joining forces to create a new company that will be listed on Nasdaq, Alvarium Tiedemann Holdings. They have aggressive growth targets for assets and earnings. The new enterprise expects to have a public value of almost $1.4 billion.<\/p>\n<p>\u00a0<\/p>\n<p>\u00a0<\/p>\n<p><a href=\"https:\/\/rixtrema.com\/blog\/wp-content\/uploads\/2022\/04\/22.jpg\" data-rel=\"lightbox-image-1\" data-rl_title=\"\" data-rl_caption=\"\" title=\"\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-9858 size-large\" src=\"https:\/\/rixtrema.com\/blog\/wp-content\/uploads\/2022\/04\/22-1024x683.jpg\" alt=\"\" width=\"960\" height=\"640\" srcset=\"https:\/\/rixtrema.com\/blog\/wp-content\/uploads\/2022\/04\/22-1024x683.jpg 1024w, https:\/\/rixtrema.com\/blog\/wp-content\/uploads\/2022\/04\/22-300x200.jpg 300w, https:\/\/rixtrema.com\/blog\/wp-content\/uploads\/2022\/04\/22-768x512.jpg 768w, https:\/\/rixtrema.com\/blog\/wp-content\/uploads\/2022\/04\/22-500x333.jpg 500w, https:\/\/rixtrema.com\/blog\/wp-content\/uploads\/2022\/04\/22-800x533.jpg 800w, https:\/\/rixtrema.com\/blog\/wp-content\/uploads\/2022\/04\/22-272x182.jpg 272w, https:\/\/rixtrema.com\/blog\/wp-content\/uploads\/2022\/04\/22.jpg 1101w\" sizes=\"auto, (max-width: 960px) 100vw, 960px\" \/><\/a><\/p>\n<p>More of such listings and deals will come in the near future to the RIA industry. It\u2019s a hot ticket in the wider financial advice industry, which is the new normal for RIAs.<a id=\"major-challenges-for-advisors\"><\/a><\/p>\n<p>\u00a0<\/p>\n<h2><strong>Major Challenges for Advisors<\/strong><\/h2>\n<p>\u00a0<\/p>\n<p>After two years of the Pandemic, advisors are facing major challenges bringing new clients in the door and are struggling to focus the necessary time and effort on building the key components of their business.<\/p>\n<p>Three out of four advisors have problems with goal management as they seek to grow, with many of them looking to increase their offerings to clients, according to a recent study by the turnkey asset management platform\u00a0<a href=\"https:\/\/www.investmentnews.com\/assetmark-launches-new-digital-prospecting-marketing-tools-216796\">AssetMark Inc.<\/a><\/p>\n<p>The study of 750 wealth managers found the most common challenges advisors face today are scaling their business for growth and spending the time needed on business-building activities, like financial planning with clients, practice management and new business development.<a id=\"the-action-plan\"><\/a><\/p>\n<p>\u00a0<\/p>\n<h2><strong>The Action Plan<\/strong><\/h2>\n<p>\u00a0<\/p>\n<p>\u201cTo achieve scale and growth, advisors need to prioritize their limited time,\u201d said Matt Matrisian, chief channel officer at AssetMark. \u201cInvestment management can be very time-consuming and doesn\u2019t generate the same value as spending time on clients.\u201d\u00a0<\/p>\n<p>In fact, more than nine in 10 advisors who have outsourced at least some aspects of their business reported their total assets have grown as a result. Ninety-five percent of respondents also said the change meant they had a better work-life balance, according to AssetMark\u2019s recent\u00a0<a href=\"https:\/\/gbr01.safelinks.protection.outlook.com\/?url=https%3A%2F%2Fwww.assetmark.com%2Foutsourcing-study-assetmark&amp;data=04%7C01%7Csallocca%40investmentnews.com%7C9140e5e7d9254d39c39708da05c83478%7C6ae5dd27b529436387aece17b5f56dc1%7C0%7C0%7C637828654676672234%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C3000&amp;sdata=nmVteP19Ddx6PQjLN90JxFCutuGovKdqTGTLZSVr8A4%3D&amp;reserved=0\">Impact of Outsourcing study<\/a>.<\/p>\n<p>While outsourcing can save crucial time, many advisors are still concerned about paying higher fees. The top reasons for not outsourcing among the advisors surveyed included higher fees (65%), concerns about a loss of control (48%) and the perceived inability to customize solutions for unique customer situations (43%).<\/p>\n<p>\u00a0<\/p>\n<p><a href=\"https:\/\/rixtrema.com\/blog\/wp-content\/uploads\/2022\/04\/33.jpg\" data-rel=\"lightbox-image-2\" data-rl_title=\"\" data-rl_caption=\"\" title=\"\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-post-thumbnail-size wp-image-9859\" src=\"https:\/\/rixtrema.com\/blog\/wp-content\/uploads\/2022\/04\/33-750x330.jpg\" alt=\"\" width=\"750\" height=\"330\" \/><\/a><\/p>\n<p>If outsourcing isn\u2019t an option, there are other approaches common among top-performing advisors. According to a\u00a0<a href=\"https:\/\/www.investmentnews.com\/trends-in-high-performing-financial-adviser-teams-204513\">2021 study by Morgan Stanley &amp; Co.,<\/a>\u00a0fostering diversity and keeping up with the latest technology advancements were critical to next-generation growth. The top planning teams of the future will demand advanced tools and resources as they shift their client service models, and a focus on diversity will help attract and retain both talent and next-generation clients, according to the report.<\/p>\n<p>So, financial advisors have different options to face new challenges in the post-Covid world and hopefully, the way they will do that results in improved efficiency.<\/p>\n<p><em>RiXtrema offers a wide range of financial tools to our clients. You can learn more about them on our website <a href=\"http:\/\/www.rixtrema.com\">www.rixtrema.com<\/a>.<\/em><\/p>\n<p><em>New challenges are a lot to worry about already, so take the stress out of marketing, at least, with Larkspur Executive \u2013 <a href=\"https:\/\/rixtrema.com\/landings_larkspurexecutive\">Book a Free Demo Today<\/a>.<\/em><\/p>\n<p><em>\u00a0<\/em><\/p>\n<p><em>RiXtrema\u2019s another tool \u2013 <a href=\"https:\/\/rixtrema.com\/pctpro\">Portfolio Crash Testing<\/a> (PCT) \u2013 helps financial advisors determine the best way to adjust clients\u2019 portfolios to reflect their values and needs.<\/em><\/p>\n\n\n\n<div style=\"height:40px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter size-full\"><a href=\"https:\/\/rixtrema.com\/landings_pctpro?source=blog070422\" target=\"_blank\" rel=\"noopener\"><img loading=\"lazy\" decoding=\"async\" width=\"700\" height=\"305\" src=\"https:\/\/rixtrema.com\/blog\/wp-content\/uploads\/2021\/04\/2-banner-PCT-min.jpg\" alt=\"\" class=\"wp-image-7799\" srcset=\"https:\/\/rixtrema.com\/blog\/wp-content\/uploads\/2021\/04\/2-banner-PCT-min.jpg 700w, https:\/\/rixtrema.com\/blog\/wp-content\/uploads\/2021\/04\/2-banner-PCT-min-300x131.jpg 300w, https:\/\/rixtrema.com\/blog\/wp-content\/uploads\/2021\/04\/2-banner-PCT-min-500x218.jpg 500w\" sizes=\"auto, (max-width: 700px) 100vw, 700px\" \/><\/a><\/figure><\/div>\n\n\n\n<div style=\"height:40px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n","protected":false},"excerpt":{"rendered":"<p>Wall Street was aware of this trend for years, pointing to the fact that the Big Four wirehouses, which also include Wells Fargo Advisors and UBS, have the wealthiest clients and the financial advisors who generate\u00a0the greatest amount of revenue\u00a0in the industry.<\/p>\n","protected":false},"author":25,"featured_media":9860,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[168],"tags":[],"class_list":["post-9856","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news"],"jetpack_featured_media_url":"https:\/\/rixtrema.com\/blog\/wp-content\/uploads\/2022\/04\/The-RIA-Industry-vs-Financial-Advisors.jpg","yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v15.9.1 - 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