1. Transitioning to householding
With margin compression still a real threat to growth, RIAs need to improve their ability to provide truly holistic and superior advice to ultra-high-net-worth and high-net-worth clients. Top advisors have shifted from account-based portfolio modeling to householding to gain a more holistic view of their clients, transitioning from managing an individual with multiple account types, to a more comprehensive service offering that includes family relationships and intergenerational wealth. Data aggregation combined with rebalancing and integrated trading are vital to shift effectively to householding.
2. Scaling personalization
Today’s investors want their investment experiences to mirror their unique preferences and values. Advisors who can personalize and tailor models to their clients’ individual specifications are more likely to build loyal, long-term relationships. To do so effectively at scale, they need a rebalancing solution that provides rules, parameters, exceptions, opportunities to gain tax efficiencies, and what-if scenarios to better position clients for the future.
3. Supporting M&A transitions
Some RIAs look to mergers and acquisitions (M&A) to add new products, bolster their existing product portfolios, enhance processes, and/or improve operational efficiency. But this is often easier said than done. Firms must be able to scale to this near-instant growth once the deal is complete, as well as quickly consolidate trading and effectively transition and support their new advisers. Dynamic, flexible technology platforms allow advisers to hit the ground running, increase their productivity and compete on a more advanced level.
4. Increasing profitability through operational efficiency
For RIA firms, increasing growth and profitability is about more than adding new business; it also requires lowering operational costs in the process. Automated workflows enable firms to more efficiently trade and manage money, increase margins, and ultimately grow without necessitating a bigger operational budget to compensate. For example, trade order management that is tightly integrated with portfolio rebalancing and trading processes will save time and effort while reducing the risk of errors or delays. FIX connectivity, direct interfaces with various brokers’ proprietary trading algorithms and strategies, and live order status notifications can help to further amplify trading and operational efficiencies.
5. Enabling proactive portfolio rebalancing
Thanks to continued market volatility, advisors and asset managers increasingly need the ability to quickly monitor and make tactical decisions across their investment portfolios. Powerful portfolio rebalancing technology enables them to quickly align portfolios to changing risk tolerances and preferences, as well as take advantage of tax-loss harvesting opportunities.
Driving accelerated RIA growth
A recent RIA Edge study found that in 2021, RIAs were employing 879,000 individuals and working with about 60.8 million clients, which is a 17% increase from 2020, and 94% of surveyed RIAs believe their firm will increase its assets by 10% or more in 2022.
As firms pursue new growth avenues, dynamic and adaptable investment management technology platforms can help to simplify increasing complexity of investment portfolios, client relationships and operations – while allowing them to continue to implement their unique investment management approach and manage it efficiently, accurately and reliably.
With the right wealth technology platform, RIAs can effectively scale to growth and gain greater flexibility to meet on-demand requests of sophisticated clients across multiple segments, accounts and households.