Key to Asset Managers' RIA Success: Control the Message

With sources of new growth harder to come by for asset management firms, many of them are eying the red-hot registered investment advisor (RIA) market. It’s easy to see why RIAs are attracting so much attention – it’s the explosive growth they’ve achieved in recent years. Using the fee-only approach, and buoyed by strong performance in the equity markets, RIAs have really been on a roll lately.

Impressive Growth

The fast growth of this slice of the wealth management industry was spotlighted recently in Charles Schwab’s 2015 RIA Benchmarking Study. In the study, which polled more than 1,000 RIAs, almost half of the responding firms (42%) have doubled their revenues, and more than half of them have grown their AUM by at least 75% over the last five years. Other impressive stats in the Schwab RIA report include half of the firms reporting that since 2009, their new client acquisitions were up by over 24%, their average account size grew to $1.9 million, and their media client retention rate was 97%.

A Fragmented and Diverse Channel

While its growth numbers make it attractive, the RIA market is also highly fragmented and diverse. On the Forbes Top 100 Fee-Only Advisors list for example, 44 of the firms had AUM under $1B. Financial Planning’s 2015 list of the Top 100 RIAs included only three firms with more than 100 employees.

As one industry pundit put it, “RIAs are like snowflakes. There are lots of them, and each one is unique.”

RIA Channel Challenges for Asset Management Firms

To gain traction with RIAs and build up profitable business with them, asset managers have to tackle the problems that stem from this channel’s complexity. But for figuring out how to maintain consistent branding and messaging while communicating with hundreds of firms and thousands of advisors is tough. Following are some of the challenges involved:

  • Brand management – To win mindshare among RIAs and wallet-share with their clients, asset managers must control how their brand and key messages are presented by RIAs to their clients. But due to the arms-length relationships asset managers have with RIAs, they often have little control over how their materials are used and presented in this channel.
  • Right hand vs. left hand – Asset management firms tend to have siloed marketing operations, which means that materials for RIAs are produced using different processes, stored in different locations and distributed in varied ways. This makes it difficult to maintain unified, coordinated and coherent marketing and distribution efforts with RIAs.
  • Timeliness of materials – Asset managers face ongoing challenges in producing updated materials and getting them to RIAs in a timely manner. With the RIA channel, where there is much less familiarity between firms and fewer processes in place, it’s even more difficult for asset managers to get their updated materials to these firms in a timely manner.
  • Handling ad hoc requests – RIAs often reach out to asset management firms with pressing requests for specific materials, which is disruptive for their marketing teams. Having an efficient way to respond to these ‘out of the blue’ requests helps asset managers keep their firms and offerings top of mind with their RIA partners.

Content Automation Helps Address Channel Complexity Issues

Content automation solutions provide asset management firms with an efficient and effective way to maintain their brand consistency and message alignment in all the materials they provide to their RIA distribution partners.

With content automation, asset management firms can create dynamic templates that give RIAs instant access to the content they’re looking for – the relevant, compelling, up-to-date and compliant materials RIAs need for their client interactions. These templates give RIAs the ability to quickly produce customized collateral, presentations and reports while simultaneously enabling the asset manager to control the information included in those materials. This ensures that RIAs have timely and accurate materials, and it eliminates the problem of different RIAs using different data sets.

Content automation technologies give asset management firms effective ways to control their brand and messaging, and to drive consistency in all materials they produce for their RIA partners.  For increasing numbers of asset managers, this consistency and control is paving the way for greater success in the RIA channel.

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