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Industry Spotlight > RIAs

How Fidelity's Helping Smaller RIAs 'Get to the Next Level'

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The higher rate of U.S. inflation, heightened market volatility and increased business expenses account for a 40% decline in RIA assets under management, according to Fidelity Investments’ 2023 Benchmarking Survey. Organic growth dropped from 8.2% in 2021 to less than 4% in 2022.

“Organic growth is one area where we’ve seen a challenge across the board,” Noni Robinson, head of emerging RIA at Fidelity Institutional, says in an interview with ThinkAdvisor.

In the smaller and mid-sized RIA segment, organic growth is a significant issue since these firms typically lack dedicated staff to help them “evolve to the next level,” Robinson notes.

But Fidelity, among other firms, is making a concerted effort to help such custody clients by supporting them in such areas as technology integration, operating efficiencies, scaling and portfolio construction.

Other areas of RIA concern are cybersecurity and attracting talent. In the interview, Robinson cites a Fidelity white paper that details five areas of focus for drawing talent, like creating “a destination workplace.”

Robinson, who joined Fidelity in 2022 after more than 23 years at Vanguard — most recently as head of retirement plan client services of the Institutional Investor Group — explains much of the plan for RIAs that she developed. That includes Acceleration, a program now being rolled out that’s designed specifically for smaller high-growth RIAs.

In the interview, Robinson says that Fidelity hired her to provide “a refreshed vision and strategy” for the emerging RIA segment of the firm’s custody clients.

Here are highlights of our conversation: 

THINKADVISOR: What’s the biggest challenge facing both emerging and long-established RIAs?

NONI ROBINSON: There are a few prevalent trends we’ve identified. In our 2023 Benchmarking Study that [covered] 2022, a couple of things rose to the top.

No. 1: Organic growth is one area where we’ve seen a challenge across the board. It dropped below 4%, down from a high in 2021 of 8.2%. So this is an area of focus for RIAs.

We’re currently conducting our 2024 study, which will include analysis of 2023 performance.

What caused that big decrease?

A couple of headwinds contributed to it: higher inflation, higher market volatility, increased expenses in running their businesses.

Of course, there’s been a lot of merger-and-acquisition activity with larger firms [buying smaller ones]. So organic growth has been a challenge for many RIAs.

What else is an issue for emerging and mid-sized RIAs?

The tech stack: These RIAs have six or more technology solutions that they’re using to run their businesses.

The integration of [all those] can become challenging. This too is an area of focus for most RIAs regardless of size.

What do small and mid-sized RIAs need from your team that larger firms typically would not?

Many small RIAs have only one to three people in their offices. They often don’t have a dedicated chief technology officer or a dedicated business development function. So they’re wearing lots of hats.

Because many of the smaller RIAs don’t have [a big] staff as the larger RIAs do, they’re looking to us to provide expertise and additional support.

For example, they’ll have questions about technology integration and comparing different options to customize their tech stack.

How else do you help?

We provide insights and support in areas like practice management, which are really valuable to small and mid-sized firms.

We also engage with many of them on portfolio construction solutions, talent, operating efficiencies and how to scale.

Fidelity issued a white paper on “Five Focus Areas to Help You Attract Talent.” Please comment.

We educate firms on hiring and attracting talent.

[The white paper advises]: “Source from diverse talent pools, enhance recruiting and interviewing practices by leveraging different channels, attract next-generation talent from colleges and cultivate and nurture your culture to create a destination workplace.”

What else concerns RIAs nowadays?

Cybersecurity. There have been many cyber events in our industry. So that continues to be an area of interest for RIAs no matter what their size.

Please talk about the digital community, “Finteract,” which is affiliated with Fidelity and was just launched in April 2023. Participating advisors and other financial services professionals can keep up with industry trends and talk shop. No vendors are permitted, and it’s product-agnostic. Please elaborate.

It’s designed as a forum that advisors can go to to communicate and chat with one another. There are webinars. It’s open architecture. So you don’t have to be a Fidelity client.

You were with Vanguard for more than two decades before joining Fidelity. What’s your mission at the firm?

I was brought in to focus on providing a refreshed vision and strategy toward the emerging segment of the business.

Fidelity recognized that there’s an opportunity to provide greater focus on the solutions we have that meet the needs of smaller advisors and to look for opportunities to deliver new solutions to help this sector of the market grow. 

Would you give me an idea of the strategic business plan you’ve developed and implemented?

The plan is focused on aligning the right tools and resources that we use to support the RIAs and help them grow and meet their objectives.

For instance, we implemented a program called Accelerate, which we’re in the process of rolling out over the rest of the year.

Please tell me about the program.

Accelerate is designed for smaller high-growth RIAs. It has webinars on growth, including leveraging the right technology and tools specifically for growth efforts. 

So we continue to look for opportunities to develop new solutions that will help this section of the market grow. My main point is that often these RIAs don’t have staff to [enable them] to evolve and take their business to the next level.

Bigger firms have many employees with dedicated officers for that. The smaller ones rely on us a lot for that expertise.



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