Fidelity Reveals ‘Secrets’ of Successful RIA Firms

Fidelity Institutional Wealth Services has published three white papers that use the practice management best practices of a number of successful RIA firms in three key growth-building areas of concern to all advisors: referrals and marketing, how to make strategic hires inside a firm and how to address mergers and acquisitions. 

David Canter (left), the executive vice president who heads practice management and consulting at Fidelity IWS, said the series grew from the RIA custodian’s benchmarking efforts, in which he and his team kept hearing from advisors,  “How do I grow as fast and as cheap as the best firms?” While Canter said, “We have strategies, but wouldn’t it be great to capture the special sauce, if you will, of the best firms out there?” Those firms, including Buckingham from St. Louis and Brinton Eaton from New Jersey, were, he said, firms in the top quartile of growth as measured by three-year compound annual growth rate. “Let’s focus on bigger firms of $500 million and above—the upper echelon.”

While in that “sweet spot” for growth, between $500 million and $1 billion in assets under management, these successful companies implemented strategies to spur further growth. “A number of the strategies” employed by those firms, said Canter,  might seem “back to basics—asking for referrals; asking why they don’t get referrals” from both end clients and centers of influence, and having a shared knowledge within the firm of how and where they wanted to grow.

 According to Canter, “Our mantra is ‘We want to make practice management and consulting insightful, strategic and actionable,’” so these white papers, “these profiles in growth” are like a “study group in a box.” Canter described his job as making those insights “strategic through our relationship managers and my team.” Their approach includes using Fidelity’s Referral-Edge database, which allows advisors to “mine for prospects based on publicly available data and interlocking relationships,” as well as through business development workshops and direct consulting with firms. On the HR front, Canter said, “we also come into the mix with strategic hires,” identifying candidates through his team’s networking and an outside human resources search firm.

Canter acknowledged that while “there’s no panacea or silver bullet to help a firm grow, there are some strategies that the successful firms are using. If you’re serious about taking the time and discipline, you can achieve success.” Some of those strategies may sound basic, but “it’s all in the execution; that’s where we try to help. Strategy is easy but execution is hard.”