If you are a small RIA, you are in good company. The vast majority of RIA firms are "small," managing fewer than $150 million in assets, according to Cerulli Associates' 2013 Advisor Metrics.

Yet smaller firms hold just 10% of the assets in the RIA channel -- which can make them feel like a minority when going up against the asset growth of the large wealth managers.

Not every small firm looks to compete with (or become) a large firm. Many simply want to grow in a smart and efficient way.


This may seem like a simple concept: Win new clients, hire new staff and, finally, invest in new technology and processes to propel the business forward. However, for small firms -- whose headcount is typically five or less, according to Fidelity's 2014 RIA Benchmarking Study -- the process can present many unique challenges in efficiency and scale. Life under $150 million may mean balancing growth with running a business and serving existing clients.

To better understand these challenges and help small firms overcome them, Fidelity Institutional Wealth Services invited principals of many small RIAs to a collaborative summit at our offices in Boston. While growth was on everyone's mind, it became clear that the firms who were actually expanding were those looking at it with a long-term view.

When it came to winning new clients, finding talent and creating scale, these firms had a clear long-term view that helped them make forward-thinking decisions.

Here are a few of the takeaways we gathered that could help other small RIAs looking to grow.


It's a logical assumption -- to grow, small firms need to find more clients. But, through the dialogue at the event, it became clear that simply bringing in new clients may not make an efficient, growing firm. Applying a long-term view to winning new clients may mean defining a target client profile and sticking to it.

As John Morris, co-founder of Crestwood Advisors in Boston -- a once-small firm that became a billion dollar firm -- said, "Stick to your knitting. Don't take the coins in the couch."

According to Fidelity's 2014 Benchmarking Study, high-performing firms -- firms in the top 25% when it comes to growth, productivity and profitability -- have a higher percentage of clients who meet their target client profile.

The group at the event discussed the important linkages between growth and staying true to your firms' core strengths -- which can mean staying true to a client profile that may be best served by those strengths. By refocusing on the clients you can serve well, small firms can potentially create a "wow-factor" when it comes to service, helping to generate peer referrals that may benefit the firm for the long term.


In today's recruiting landscape, finding new advisors is a challenge to all firms -- both big and small. Fidelity's 2014 Recruiting Redefined study found that 95% of firms are hiring to support growth, and 85% see recruiting as a formidable challenge.

But our group of smaller RIAs confirmed that they face an additional stress point when it comes to talent: time. As one firm leader said, "You can't do everything and strive to grow." As small business owners, principals of small firms struggle to find the time to recruit strong talent, and adding to the stress is their inability to compete with larger firms that have established recruiting programs.

So how can small firms not only find talent, but recruit in a way that has long-term benefits? Even in the early days, Morris said, Crestwood's strategy was to embrace a long-term vision of roles and responsibilities -- for all staff.

Today's talent may not care if you are a large or small firm, Morris said. Prospective hires just "need to clearly see that you have a plan to grow the business and how they fit into that plan."

Another key point: Our Recruiting Redefined study showed that the No. 2 job attribute young financial professionals are looking for is growth potential. So consider looking at ways to groom employees and create a career path that caters to their interests.

Meanwhile, don't forget a career path for yourself. Morris suggests finding talent that may allow you to do what you love, whether it is working with clients or working the books. After all, if you apply the right long-term talent strategy, you may not be doing "everything" forever.


During the daylong summit, it was difficult not to keep coming back to small firms' struggles with efficiency and scale. One factor that makes matters even more challenging: As investors' behavior has evolved, clients are demanding more frequent communication, mobility and collaboration.

So, how do smaller firms keep up with such a high-touch investor in an efficient way? The group discussed the opportunity for small firms to "incorporate high-touch into their culture" via use of technology, software and efficient workflow.

Some were leveraging cloud-based software to keep their advisors on the go. Others were focused on maximizing CRM to keep track of their clients' personal preferences and milestones -- such details as anniversary dates, or whether clients prefer weekly email updates.

By leveraging technology to encourage a high-touch culture, small firms can not only address their challenges with scale, but can work to improve their client experience for the next generation of investors -- which in turn can help position a firm for potential long-term growth.

No matter the size or shape of the firm, we continue to hear the same thing from firms looking to grow: "Do not tell me where I am today -- tell me where I should be tomorrow."

Morris summed up the advice well. "Being a small, independent firm offers enormous opportunity," he reminded attendees. "You are in the right space at the right time. Keep the future in mind and success will come."

David Canter is an executive vice president for practice management and consulting at Fidelity Institutional Wealth Services.