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What RIAs Need to Do Before They Can Grow

By Jane Wollman Rusoff

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There’s little doubt that RIAs want to grow. 

But first, “you have to choose how you want to support that growth,” Sara Baker, president of Triad Wealth, tells ThinkAdvisor in an interview.

 “Growth equals hiring, or growth equals outsourcing,” is how she describes the two main strategies.

The chief challenge to RIA growth, Baker notes in the interview, is that the advisor must first establish “a core,” built on operating structure, culture and mission, among other essentials, before launching a marketing strategy.

“If you don’t have a solid vision, brand and the right people in place, then you’re going to throw money down the drain,” she says.

Baker, who last month was promoted to president from chief planning and legal officer, was previously Edelman Financial Engines’ vice president of advanced planning strategies.

Triad Partners opened three years ago. Triad Wealth, its sister firm, debuted in summer 2023 to help RIAs grow by providing back-office functions, outsourced marketing, sales support and more.

Triad Partners, which has 55 partner firms with assets under management ranging from zero to $1 billion, is an integrated marketing organization, supporting independent insurance agents. The firm has already been helping partners grow using annuities and insurance.

In the interview with Baker, who was speaking by phone from Kansas City, Missouri, Triad’s base, she also opines on why RIAs should consider selling annuities, depending on a client’s needs.

Here are excerpts from our conversation:

THINKADVISOR: What’s your attitude about financial advisors becoming RIAs?

SARA BAKER: We’re an RIA that works with RIAs. We believe that if you want to be independent and you truly want to control your business, you should become an RIA.

The future is helping, planning and aligning clients with all their life goals. It’s not selling products or insurance. It’s figuring out what they actually want.

What’s your firm’s chief objective?

To help our member firms grow. We provide business development, coaching, outsourced marketing, sales support [and more].

What are the main challenges to growth for an RIA, and how can they be met?

There are a handful. You have to have a strategy [right away] before you start marketing and doing other things to help you grow. This is very much overlooked. 

One of the top challenges is not being prepared to hire once you decide you want to grow. 

You can be really good at sales and know how to bring folks into a seminar. But growth equals hiring; [alternatively] growth equals outsourcing. 

So you have to choose how you want to support that growth.

How do growth and scale differ?

People confuse growth and scale, but those are two very different things.

They think if you’re growing, you won’t need to hire if you’ve scaled your business. That’s inaccurate.

If you’re going to grow and are spending money on live events, that means hiring people. 

A lot of firms don’t have the right leader who can manage people or aren’t prepared to hire them.

What are the growth strategies your firm recommends and provides for its partner RIAs?

It varies by firm according to where they are in their maturity. But No. 1 right out of the gate is aligning their business vision and objective, refining their brand, and the way they [refer to] themselves to their clients and prospects.

They’re [already] heavily focused on seminar and digital marketing, which are two really big levers. 

But before you focus on those and invest more in them, the first step is to get clear on your brand, update your website and find your sales process. That’s [part of] the core.

If you don’t fix those — if you don’t have a solid vision, brand and the right people in place — then you’re going to throw money down the drain marketing.

You need to have your core established: your operating structure, culture, vision, mission, plan. 

All that will help you with seminars and other marketing strategies.

Should RIAs have an AUM goal that they aspire to in a given time frame?

That’s very personal to the advisor. Do you want to sell your business to your employees? Do you want to build it up to a lifestyle practice and sell it to a larger company? Do you want to manage people? Do you want to outsource everything?

Before you set a growth goal, you have to have a really good partner who helps you answer those questions and think deeply about what you want your company to be and why you want to accomplish those things.

You need to have a business coach, an executive coach, or a community of other folks who are in shoes just like yours. Otherwise, you’re going to be [too] linearly focused on your business.

A good financial advisor makes clients walk out of a meeting saying, “You’re making me think of all these things I’d never ever thought of.”

An advisor needs to do that. 

You were previously with Edelman Financial Engines. How did you help them grow?

I had various roles. I was in products and technology, helping to run the integration of Financial Engines and Edelman Financial Services [after they merged] and figuring out what their offering and platform would be. 

That wasn’t direct growth; it was needing to build something that was unique — bringing those two very distinct companies together to maximize the value.

It was leveraging technology on one hand and leveraging the power of human relationships on the other.

How did you help them with direct growth?

There was a time when we were ready to do inorganic growth again and do acquisitions.

I ran the integrations for the RIAs we acquired, and [many had] additional capabilities. [The latter] is a great way to grow your company and add value. 

In the RIA universe, what role can annuities play?

An annuity is a tool in the toolbox for an advisor to use to help clients accomplish their goals.

There are some clients for whom an annuity doesn’t make sense. But there are instances where an annuity can be in the best interest of a client.

They can be used effectively and are certainly a lever that can help clients accomplish their goals.

But there are some negative connotations to the word annuity, and very much so in the RIA industry.

Why is that?

A lot of advisors are very proud to say that they’re fee-only, that they charge on a percent of assets under management and aren’t taking any commissions or receiving any other forms of compensation.

But in some situations, in their best interest, the client may need an insurance product, for which advisors don’t get paid in the way [they do with fee-only].

So that [prompts the] negative connotation. I respect that. But I also think it’s short-sighted to say that no clients ever need an annuity under any circumstances.

As a fiduciary, you should figure out what goals your clients need and use the best tools in the toolbox. 

Don’t use a hammer every single time.

Jane Wollman Rusoff

@jrusoff2

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