Podcast Center
Video Center
Webcasts
Resource Center
Events
By 
October 29, 2018 at 03:28 PM
Independent RIAs can derive benefits they may not have realized by leveraging a chief operating officer to manage day-to-day responsibilities.
So says the sixth in a series of industry reports from PFI Advisors, a firm that works with billion-dollar breakaway teams to establish their own RIAs. The report says that although RIAs generally regard COOs as cost centers and not revenue generators, leaving the management of ordinary activities to COOs frees up RIAs to focus on business development and client service.
The report “Exploring the Benefits of Professional Management for RIAs — A Deeper Look into Chief Operating Officers” profiles five billion-dollar RIA COOs and provides “real-life examples” of how those COOs “have allowed their respective RIAs to evolve and remain competitive.”
The report points out that as firms grow past $1 billion and start to aim at $10 billion, they “will need to incorporate both aggressive organic and inorganic growth strategies.” To do that, advisors need to maintain a level of service that continues to impress clients, and that means they need to maintain their back office and technology in a way that’s both robust and scalable — hence, the hiring of COOs.
The report cites Cerulli Associates pointing out that larger RIA enterprises require “institutionalization of processes, centralized staff support, specialized roles and well-defined organizational structure.” And that’s where professional management comes in, with COOs taking over the daily functions and freeing up RIAs to do what they do best.
