WASHINGTON â If you want to become a multibillion dollar advisory firm, be prepared to make some hard decisions.
Principals committed to growing their RIA into an enterprise firm need to recognize the difference between management and leadership, said Brent Brodeski, CEO of Savant Capital Management.
âManagement is telling people what to do,â Brodeski told advisors at a session titled âThe Road to a Multi-billion Dollar Firm: Pushing Past Challenges and Setbacksâ at Charles Schwabâs annual IMPACT conference. âLeadership is having a vision and attracting people to it.â
Owners will have to give up some things they enjoy doing.

âI was good at attracting assets, but the business needed something different,â Brodeski explained, âSo I focused more on providing leadership and vision.â
Firm founders will also have to learn that they wonât be able to accomplish everything on their own. Hiring a capable staff will only help.
âWe had to learn where we werenât excellent, and let others take over,â Brodeski said. âWhen we hired, we looked for people who complimented us, not people who were just like us.â
While cultivating homegrown employees to become asset gatherers is always preferable, âmost firms have zero experience developing people,â noted industry consultant John Furey, who also spoke at the session.
Whatâs more, Furey added, âDeveloping people is a high risk strategy. You canât predict the results.â
"The best people are hard to get."
Consequently, RIAs are increasingly hiring from each other, bidding up the cost of talent, Furey said.
The challenges of attracting high quality advisors was a chief reason Savant began to acquire other firms, Brodeski said.
âThe reality is the best people are hard to get,â he said. âTheyâre not standing on a street corner waving a resume and saying âHire me.â So if you canât hire them, you can add them by merging with another firm.â
But the frothy M&A market isnât for the faint of heart, warned Matt Cooper, CEO of Beacon Pointe Advisors.
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A buyersâ offer to provide back office services for a smaller seller is now just âtable stakes,â Cooper said.
M&A is about âeconomics and emotion,â Cooper said. If valuations and deal structures are similar, he explained, âYou have to give sellers a personal reason where they fit best.â
Cooper also cautioned that M&A comes with a potential âopportunity costâ for growing RIAs: principals who might otherwise be bringing in new business â and revenue â are instead trying to persuade firm owners to sell, a much riskier proposition.
Brodeski added his own word of caution to potential buyers.
âYou donât get good at M&A until you screw it up a few times,â he said.