Brand space race threatens smaller RIAs

Solo practitioners and other small registered investment advisory firms are going to have a harder time competing once a few RIAs attain national-brand status, according to the CEO of one big firm. “They can compete against Merrill Lynch now on the basis of being a fiduciary,” said Joe Duran, chief executive of United Capital Financial Advisers LLC, an RIA with $14 billion in assets under advisement. He expects that United Capital will become a nationally known RIA brand in coming years. “Five years from now, there will be three large national [RIA] firms. Small local RIAs won't have the pricing muscle, brand name or marketing muscle to compete,” Mr. Duran said. United Capital has made several acquisitions over the past few years in an effort to build a brand name that is recognized nationally, just like the wirehouses are today. Mr. Duran said that more deals are in the works that will give the company a presence in some cities for the first time and will expand its presence in some others. Today it has 36 offices nationwide. He said United Capital isn't the only firm that is shooting for national prominence. “Forward-looking advisers see a shift,” he said. “We are starting to see a race among RIAs.” As a few RIAs gain national prominence, they will have access to institutional-class shares and other means to lower their costs, combined with sophisticated marketing programs that small firms won't be able to match. “It will be interesting to see how it unfolds,” Mr. Duran said. “We want to be the first billion-dollar brand in the RIA space.”