Along with the thousands of advisers under one roof here at the Schwab Impact conference in San Francisco, there are also thousands of opinions on issues ranging from economics to politics.
Along with the thousands of advisers under one roof here at the Schwab Impact conference in San Francisco, there are also thousands of opinions on issues ranging from economics to politics. But when it comes to running their businesses, there seems to be a budding consesus among many of the RIAs and advisers that InvestmentNews has talked to since the conference started yesterday: RIAs want tools - and options - for expanding their practices and growing their client bases.
With the outlook for asset appreciation modest - at best - over the next year or so, many advisers are placing more emphasis on things that they can attempt to control, in hopes of boosting revenue and/or increasing their profit margins. Whether it's merging with other RIAs, or doing tuck-ins, for example, some firms are eying partnerships to help expand their business. That's one of the main reasons that merger and acquisitions activity has picked up considerably in 2011, noted David Devoe, Schwab's managing director of strategic business development in an interview with IN's Andrew Osterland earlier today. (Stay tuned for an upcoming INTV segment with Mr. Devoe on the outlook for RIA M&A activity in 2012.)
A prime example n display here today was the deal that United Capital struck - announced at Impact - to acquire Peak Capital, an advisory firm with more than $600 million. (Read more here.)
Not all advisers are looking at mergers or partnerships, of course. Some are looking to staff up, strategically, to attempt to bring on more clients. One RIA exec, for instance, mentioned that he is specifically looking to beef up his firm's CPA headcount to attempt to draw more clients in to the firm who are seeking clarity on many new, or potential, tax issues that could impact high-net-worth individuals. Another RIA exec also mentioned that his firm is also looking at overhauling its incentive compensation plan, in an attempt to lure new talent to the firms and better align pay with performance - and ultimately results.
The specific steps vary greatly, of course, as you'd expect in an industry with more than 28,000 fragmented firms that have AUMs ranging from below $25 million to upwards of $11B-$12B in the case of the RIA Giants.
But no matter the size, many of the RIAs here are actively engaging in discussions about taking their practices to the next level - without hopes that the markets will simply provide all the growth they will need. For more coverage of issues from Impact, click here--M.B.
