As firms slow down their operations for 2024, several advisors are already looking to the overwhelming possibilities of 2025.
After all, it’s expected to be a strong year for investors and advisors alike. With most advisors focusing on growth or client acquisitions, newer RIAs might be investing in other areas.
In the first half of 2025, RIAs should focus on creating a personalized client experience that fosters trust and loyalty, said Terri Kallsen, managing partner at Rise Growth Partners.
“Tailoring financial solutions to individual needs and maintaining proactive communication can deepen client relationships, leading to both increased retention and new client referrals,” Kallsen said in an email.
“When you’re trying to grow, it’s easy to say yes to every opportunity. However, learning to say no to things that don’t align with your goals is just as important,” said Melissa Pavone, founder of Mindful Financial Partners, a new RIA under the branch of Forefront Advisor Network.
“A few lessons I’ve carried forward, are investing in yourself. Professional development, mentorship, or joining a peer group can offer fresh perspectives and help you avoid burnout and being client centric,” she said.
“Always ask, 'How can I better serve my clients?' Their needs and concerns evolve, so staying adaptive is crucial,” Pavone added.
Nina O’Neal launched AIM Advisors with her partner Matt Archer from a hybrid model last year. She admits she’s learned a lot over the last 18 months.
“New RIAs should focus on client communication and engagement. The changes can be confusing,” she said. “Clients want to know that not only their hard-earned money is still well taken care of but also that the change to the RIA brings benefits to them as well.”
Even older RIAs are passing on some hard-learned lessons to the up-and-coming RIAs.
“In the first year, the new RIA is likely to accept any client and not have a well-defined ideal client persona,” said John O’Connell, founder and CEO of The Oasis Group.
“We recommend that new RIAs begin to define their ideal client persona in this first year so that they know what type of client they would like to attract,” he said in an email.
“Figure out what you need to have in-house and what you should outsource and reevaluate constantly as your firm grows,” said Kay Lynn Mayhue, president at Merit.
For example, she suggested smaller RIAs might outsource money management but that can get costly for clients.
“At some point, it may make sense to bring that in house and hire an internal chief investment officer. The same thing goes for technology, HR and compliance,” Mayhue said.
“If you try to do everything yourself too early, you could eat up all your profit. If you wait too long to build out internal capabilities, your client and team experience can suffer,” she added.
Several advisors also suggested making plans to increase and create room for additional hires, especially if needs are growing within the firm.
“Don’t hire the people you need today, hire the talent and the positions that you need in the future. Otherwise, you will be playing catch-up, and your team will suffer, including the clients,” Mayhue said.
Advisors also see technology playing a significant role within firms and assert that if new RIAs aren’t focused on leveraging tech tools at their disposal, they should certainly prioritize it.
“We believe technology and security are going to be critical issues to address in early 2025. With the adoption of AI in our industry, and the threats that come along with bad actors using AI to hack systems or defraud clients, we feel that a heavy focus needs to be placed on cybersecurity and data management protocols,” said Dave Alison, president and founding partner at Prosperity Capital Advisors, in an email.
Kallsen also agreed that cybersecurity must remain a top priority, pointing to the protection of sensitive client data and compliance with evolving regulations such as Anti-Money Laundering, Know Your Customer, and other audit standards.
“As millennials and Gen Z become a more significant part of the investment landscape, RIAs should prioritize technology-driven, mobile-first solutions that cater to these tech-savvy generations,” she said. “This includes staying head of changing client demands for alternative investments and providing holistic financial advice that integrates behavioral finance solutions.”
“I’m excited to see more innovation in financial planning tools and the increasing emphasis on collaboration across industries to better serve clients,” Pavone said.
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