Balancing centralization and autonomy in a growing RIA  

The recipe for success in the registered investment advisor space is clear: Attract the best advisors in the country to join a strong, efficient firm. While that straightforward approach only involves a few steps, the strategy becomes complicated when you consider that most of the best advisors strive to be part of a great organization that provides a platform that accelerates growth and appreciates the unique way they engage with their clients.    

For many growing RIAs, the way to achieve scalability is to have a robust centralized support system in place that eliminates “busy work.” This enables advisors to focus on servicing clients in their unique markets, all the while upholding a strong national brand and scale.  

How can firms strike a balance between the advisor’s desired local client engagement preferences and the firm’s pursuit of efficiency through centralization to attain a scalable RIA? While there's no perfect balance, an environment can be fostered if the company culture encourages collaboration.   

NO ONE RECIPE BUT REQUIRED INGREDIENTS  

Much like cooking from memory, a chef aims for a balance and that comes from understanding what the desired outcomes are and then putting the right ingredients together. Similarly, when considering the growth of an institutional retirement business, a clear understanding of goals, markets, service standards and values must inform every tool, solution and staffing choice you make. Being specific about goals is the critical first step of growth for an RIA — the next is accountability over time.  

These values and goals can't be solely to grow and increase profits, though they are an important part of the outcomes. At SageView, our focus is on increasing client satisfaction and advisor capacity at local offices through efficiency that will grow profits. Developing an understanding amongst employees of the desired outcomes and how everyone can act upon those goals lays the foundation for success and provides a clear growth path. 

BUILDING CULTURE THROUGH PROCESS MANAGEMENT  

If we want to deliver high-quality results and advice to our clients, then we must have a uniform way to deliver those services in a timely manner. 

Still, getting people to change is hard. And maintaining their commitment to that change can be much more difficult. A simple example was our effort to standardize minutes from quarterly investment reviews with plan sponsor clients. By designing a standardized template that can also be customized for each client and distributing that to all our advisors nationwide, we are able to save both time and money. This approach also ensured a consistent service delivery to clients. SageView saw an exponential increase in on-time delivery of post-meeting minutes just from these changes.   

Importantly, this process to create standardization must be achieved through collaboration. Only then can RIAs build processes that allow us to efficiently create review materials across our platform. Process management that helps local offices do more in less time encourages people to continue using the workflow.  

ESTABLISHING A CULTURE THAT VALUES FEEDBACK  

Creating a meaningful avenue for feedback — along with leadership’s responsibility to listen and act upon the best of these insight— is critical. At SageView, the “best idea wins.” While process management can often feel mechanical, the solicitation and utilization of feedback leads to a better process and sustained growth.  

More often than I would like to admit, what I believe are the best ideas for new processes or work streams are shot down by our internal committees, and when colleagues explain their rationale, I am often shocked I’ve even suggested the original approach! These frank exchanges of ideas support our culture, growth and ultimately outcomes. It also gives teams a voice in the process.  

SAYING 'NO' TO IRRELEVANT STUFF  

While we have a robust feedback loop, firm leadership needs to feel comfortable saying “no” to the small stuff. A uniform look and feel of materials, reports and file names should not be a point of contention or even conversation — at some point leaders must decide and move forward.   

To get what we need, we all must give up a little of what we want. Understanding these trade-offs and knowing when to allow more flexibility is vital to a firm's success. By removing the uncertainty about procedures, we have helped our advisors take their business to the next level.  

This might not be the right approach for all firms, but all firms can agree that finding efficiency is critical to long-term success. It must start with your values and your goals. From there, hopefully, with the support of your teams in the field, you must figure out what balance will work for you.  

Robert Patton is senior vice president at SageView Advisory Group, a leading independent RIA serving retirement plan sponsors and individuals.