What's wrong with the big RIA model, straight from advisors' mouths

June 18, 2025 6:16 PM

Competitive threats are lurking beneath the surface of the dominant industry headlines about the massive growth of the largest registered investment advisory firms, a new study said.

Those perils come from the need to recruit and retain top financial advisor talent and engage younger generations of clients, according to a report last month on the future of RIAs by New England Consulting Group, which lists wealth management giants like Charles Schwab, Merrill, Morgan Stanley and Citi among its clients in the financial services industries. And, as shown in the list below of anonymous quotes collected by the consultants from more than three dozen interviews, many advisors and executives privately express skepticism — or even vent their outright frustration — about the ability of the largest RIAs to meet those challenges.

Advisors' ambivalence about the role of private equity investors, barriers to their independence and a dearth of support from corporate headquarters in areas like practice management and content to share with clients and prospects could crimp the momentum of the RIA aggregators currently rolling up much of the industry, according to Tom Sebok, managing partner and principal with the consulting firm, and Tim Munoz, an advisor and principal. The conversations with advisors and executives in the study led to "where they had the greatest interest and, almost, where they wanted to unburden themselves," Munoz said.

"The churn rate, the mobility of advisors has always been a big thing, and now, with the consolidation, you'd expect that the churn would start to slow down.… It doesn't seem to be doing that," Munoz said. "They are really pretty dissatisfied with the ownership of large firms."

An "absence of perceived value in associating with a bigger firm" and the "inherent independent streak" of many advisors is driving that discontent, Sebok said.

"The posture that they take with clients whose assets are in their care has been most successful when they present themselves as having a genuinely independent and bespoke set of guidance and recommendations," he said. "That independent streak doesn't go away when they link up to a bigger firm."

To be fair, the requirements to reel in top talent and forge multigenerational relationships among clients and advisors have come to the forefront of many industry discussions in recent years. The so-called Great Wealth Transfer will send $83.5 trillion to members of Generation X, millennials and Generation Z by 2048, according to the Capgemini Research Institute's latest annual World Wealth Report. And 81% of high net worth heirs plan to drop their parents' wealth management firm within two years of their inheritance, a survey in that study found.

Current economies of scale will continue to lend the largest RIA firms "a major competitive advantage" for the next few years, according to Mike Byrnes, the founder and president of wealth management business and marketing strategy consulting firm Mike Byrnes Consulting. But the onslaught of artificial intelligence and other technology tools could soon remove part of that edge. Custodians and brokerages that both compete with RIAs and work with them could soon "create a technological solution that's packaged together so the solo practitioner doesn't have to spend their time and dollars on it," he said.

"What AI is going to do is, it's going to allow people to work less hours and make more money," Byrnes said. "The way that those owners will benefit is to be more efficient, and that's their problem right now. I think that AI solves that in the coming years."

With a lot of concern and uncertainty about the future course of RIAs, the advisors and executives New England spoke with displayed "a surprising unanimity of views on what to do," the report concluded. "Large RIA firms that are nimble, adaptive and future-focused can manage the secular changes that are disrupting the industry and emerge in a stronger position. Periods of consolidation and buying growth always yield winners and losers, but a fundamentally transformed industry landscape is something much more challenging."

For nearly two dozen thoughts on the future of RIAs from financial advisors and industry executives, scroll down the slideshow. To read a deep dive into the numbers on advisors changing firms and the many factors driving those decisions, click here. And, for J.D. Power's latest ranking of the top firms in wealth management for investor satisfaction, follow this link.

Note: All of the anonymous quotes below come from a May 2025 report by the New England Consulting Group called "The Future of the RIA Industry." Between April 2024 and January 2025, interviewers spoke with 36 advisors and eight executives "representing a cross-section of RIA corporate ownership structures" including independent firms, brokerage-affiliated teams, private equity-backed companies and bank-based wealth management programs.

Talent fights

"The services that we provide our advisors are now commoditized, and the advisors know it," an advisor-turned executive with a major RIA said. "The large-versus-small dichotomy doesn't mean that much. It's the regular migration of talent that drives the industry."

Learning names

"We hear frequently, 'I want to give my business to a firm that is aligned to my values. You're a key part of that, and I like you, but who exactly is this firm you work for?'" an advisor said of younger clients.

Gaining clients' confidence

"I worry as much about looking techno-savvy as I do about the quarterly performance report," one advisor said. "It's no longer enough to do my job well. I have to show the clients how I do my job. They want to see everything. That's the way to gain their confidence."

Screens or walls?

Younger generations of heirs "care little for the oil paintings, the wood paneling, the gracious office environment," one advisor told the consulting firm. "Nice is OK, but the younger set cares much more about what's on the screen than what's on the walls. Most of the time, we can't even get them in here!"

Traditional offices

"My younger clients have a visceral reaction to the office environment," an advisor said. "They want to know the fees are going to the bottom line, not to our overhead."

Responding to ChatGPT

"I don't want to worry about the tech stack, I want to worry about my clients," another advisor said. "But give me what I need when I need it, please, because my client is sitting in front of me right now using ChatGPT."

Fighting for the next generation

"Younger clients insist on knowing who's managing their money and their financial future," an advisor told the interviewers. "Trusting me in the same way that their parents did is not an automatic pass-through but instead is a competition for relevance and impact."

Kids today

"Wealthy people in their 30s or 40s tend to have a general business understanding that their parents did not," an advisor told interviewers. "After all, they are children of the information age. And they have significantly more interest in knowing their investment choices inside-out and not just accepting advice."

Consolidation impacts

"Given the trend toward consolidation, it is inevitable that the next big wave will be differentiating larger firms from one another," an independent RIA executive told the interviewers. "You can do that by having the best performers, by being technologically adroit and also by standing for something bigger. There are more factors in the equation today."

Better analogy than financial quarterback?

"Since clients don't make a separation anymore between their investments and their hopes and dreams, we become their financial alter egos," one advisor said.

Not always enough time for both

"I want to grow my book, of course, but I am always having to choose between growing my current clients or pursuing new ones," an advisor said. "Our leadership focuses on the latter, but I end up focusing on the former. I can't afford to be a true financial partner."

Fintech independence, please

"The seamlessness of the client interface and my own portfolio management functions have made me far more efficient, and clients seem to appreciate both the transparency and the real-time qualities of shared screens," one advisor told the consultants. "But I worked very hard to get to this point, and I would not want a corporate group to tell me to use one platform over another."

In an ideal world

"If I had a choice about where to tap into the mothership and where to steer clear of arbitrary dictates, I'd be OK," another advisor said. "But that's not really how it works."

New playing field

With all-encompassing wealth management technology increasingly available, that means "the playing field is completely levelled," one advisor said. "I do not need to pay tribute to a far-off institution that may or may not share my beliefs or understand my clientele."

Any value there?

"I'm doing well," another advisor said. "But I can't think of any real impact that my position in a large firm has brought to my own book. In my experience, there's no real value exchange going on."

Mixed PE impact

"The growing role of private equity in our business has been a bit of a disappointment," an advisor said. "The time horizons for PE and for ourselves and our clients do not align, so we have not seen the interest in facilitating growth from our new owners. On the other hand, they are laissez-faire owners, but, on the other, there's not much support."

Misunderstandings

"This business is highly personal and trust-based in a way that our national body does not embrace," one advisor said. "They think we are selling products, but we are selling trust, and trust is earned, not directed."

The best collaborations

"Maybe a partner in big law, big tax or big insurance can be helpful to me, but the ability to build those relationships myself at the local level is most important to me," an advisor told the consultants. "It matters less that you're with firm X than it does that we have a common client focus, complementary expertise and common roots in the community."

Can David beat Goliath? Yes

"Our business strength comes from our value as solo practitioners, no matter what firm name is on our business card," one advisor said. "That's why David can beat Goliath when we pitch ourselves to new clients. The benefits of large ownership are overrated — just another industry that gets rolled up in search of false promises of efficiency."

Meet me where I'm at

"If a large firm offered me some choice and customization, I would see added value in that," an advisor said to the consultants. "I would like to have a menu of options to choose from, and I would like to be able to request capabilities, bolt-ons, etc. when I need them. Ideally, the firm would support several different platforms and embrace advisor choice."

The name behind the name

"I can't think of any business that does not stand for something greater than the product or service itself," another advisor said. "People these days make choices based on the perceived value of who earns their loyalty. I was never asked much, if at all, about the large firm name on my business card because the experiences were all with me, and the clients could judge for themselves. But now I'm asked about the firm behind my business a lot."

Meaningful branding

"If I could do what I do today, but do it under a brand that truly means something to people, that would be a huge boost to my ability to be relevant to heirs, to reach new clients and to grow my business," an advisor said.

Prove yourself

"I am willing to believe that the presence of a large firm can make a difference, but I have never seen a large firm strike the right balance between shared services, a well-known brand, real investment know-how and the common sense to respect my independence," another advisor said.