CHICAGO - How can RIAs achieve significant organic growth? Maybe they could take some lessons from Mercer Advisors, which turned to its channel partners for help and reaped about $1 billion in organic asset growth over the past three years.

It wasn’t seamless, however.

“We made a lot of mistakes along the way,” said Loren Pierson, president of Santa Barbara, California-based Mercer, speaking at the annual Envestnet Advisor Summit. “There were a lot of challenges, but also huge opportunities. We were able to take advantage of them, and we brought in $1 billion in new assets.”

“This is a business that has to be earned,” said Mercer Advisors president Loren Pierson.
“This is a business that has to be earned,” said Mercer Advisors president Loren Pierson.

Before turning to its channel partners, particularly custodians such as TD Ameritrade, for help in growing its business, Mercer had developed a niche practice working with dentists around the country, advising them on 401K plans and other planning services.


But when the firm began working with channel partners, it realized it needed a new value proposition, Pierson said, and began to brand itself as a family office for the mass affluent.

“We wanted to add value and offered estate planning services, tax advice and made sure clients had a digital interface with us,” Pierson said at a conference session on how advisory firms can grow their top line.

The push for organic growth required allocating adequate resources to the effort, Pierson said in an interview with Financial Planning. Mercer was fortunate to have some capital, having been bought by growth-minded private equity firm Genstar Capital last year.


“We found out that this is a business that has to be earned,” Pierson explained. “You have to dedicate time and staff to it, you need great talent and you need to be flexible with your scheduling to accommodate prospects.”

The firm also wanted to make sure that new clients were bound to the firm and not to individual advisers, Pierson said.

“We found that consistency was the key,” he said. “We needed to be consistent in how we deliver our services, our value proposition and our marketing. It had to be the same with every adviser in every office.”


Mercer also made it a priority to “deliver a really great experience for new clients,” Pierson said – and then leverage that experience into referrals.

He compared the tactic to a customer’s enthusiasm for a new product like an iPod or an iPhone.

“You’re most excited when the product is new,” Pierson explained. “So we focused on new clients, made sure they had the best possible service and then asked for referrals in six months.”

Inorganic growth is also part of Mercers’ long-term strategy.

Earlier this year the RIA bought Kanaly Trust, a Houston-based firm with over $2 billion in assets under management, giving Mercer a presence in the ultrahigh-net-worth market.

“We see ourselves as a national firm,” Pierson told Financial Planning. “There will be more acquisitions to come.”

Charles Paikert

Charles Paikert

Charles Paikert is a senior editor with Financial Planning, a SourceMedia publication.