U.S. RIA Marketplace 2023

RIAs recruit specialized staff in the race for scale

November 16, 2023, BOSTON—As registered investment advisors (RIAs) look to achieve scale, broadening operational capacity is a key factor in improving their potential for success. According to The Cerulli Report—U.S. RIA Marketplace 2023, RIAs are considering hiring or creating new specialized staffing roles to support the demand for new services and accelerate growth.

The ability to hire specialized staff (i.e., marketing professionals, financial planners, investment analysts) represents a significant turning point in many RIAs’ growth trajectories. Revenue is often constrained in the early stages of growth and RIAs must budget smart to ensure they do not become overburdened expense-wise. Specialized staff are the formalization step for many RIAs—two-thirds (68%) of mega-team RIAs employ specialized staff compared to just 35% of RIAs.

On average, RIAs with specialized staff offer two more services than RIAs that do not. Many of the service offerings that RIAs can offer through specialized staff focus on concepts of advanced financial planning and investments, two areas that can become time- and resource-intensive. Already, RIAs spend almost one-third (29%) of their time on those two aspects of their practice. Introducing specialized staff to the equation reduces the time spent in these two areas by a modest four percentage points.

“By offloading components of service delivery to experts within the practice, RIAs can better support their advisors and return more of their time back to revenue-generating activities,” says Stephen Caruso, senior analyst. “Those with specialized staff are spending over six percentage points more time on client-facing activities than those RIAs that do not employ those roles. This difference is meaningful because it reconnects advisors to the activities that contribute to the success of the RIA,” he adds.

Overall, leveraging non-advisor specialists can be a force multiplier for RIAs that have grown to substantial AUM without much support. “By developing a new role, RIAs can encourage advisors to embrace a more decentralized approach, reducing their overall workloads while ensuring that the client experience remains uninterrupted,” says Caruso. “With more time to devote to client-facing activities, advisors can have an even stronger impact on firm growth.”

At the same time, Cerulli recognizes the decision to add staff is not one that should be taken lightly. “Human capital economics are more complicated and the infrastructure to support and develop employees is more important than ever before,” says Caruso. “Recognizing the areas to reinforce or improve are key for RIAs looking to enter a new phase of growth,” he concludes.

About Cerulli Associates

For over 30 years, Cerulli has provided global asset and wealth management firms with unmatched, actionable insights.

Headquartered in Boston with fully staffed offices in London and Singapore, Cerulli Associates is a global research and consulting firm that provides financial institutions with guidance in strategic positioning and new business development. Our analysts blend industry knowledge, original research, and data analysis to bring perspective to current market conditions and forecasts for future developments.