3 ways RIAs can attract new clients for long-term success

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“The times they are a-changin’.” Bob Dylan first crooned these lyrics in his 1964 title track to acknowledge a mass cry for social reform. Listen closely now, and you’ll hear echoes of the song’s core message underscoring some of today’s most newsworthy issues: the polarizing presidential race, an unraveling of corporate scandals and the ongoing fight for gender parity. Similarly, looking at the lyrics through a financial services lens elicits visions of policy reform, industry skeptics and the generational shift in wealth that have awoken a renewed need for change from Wall Street to Main Street.

If you want your RIA to succeed, you need to maintain or grow your client base. To do that, you must welcome the changes being demanded by the public. So how can RIAs see these demands as opportunities to position themselves for long-term success?

By now, you know that the fastest-growing RIAs must understand millennials – we’ve shared several observations of this new target audience on this blog. You also know how to employ effective marketing strategies that will help promote your brand. But the real key to attracting new clients and building long-term success lies in how your RIA is positioned to take advantage of evolving demographics and trends within the financial planning marketplace. Here are some considerations to get you started.

  1. Look beyond current income. Big-league RIAs aside, gone are the days of requiring potential clients to have millions of investable dollars before signing on to your client roster. Today, it’s all about potential earnings – meaning that professionals with high earning potential are equally as valuable to the sustainability of an RIA as their high-net-worth counterparts. Ditch the income requirements and consider how attracting millennial and Gen-X clients today will contribute to your firm’s AUM over time.
  1. Make it a family affair. Earning potential aside, younger individuals are set to inherit a massive amount of investible dollars. Over the next 30 years, approximately $30 trillion will change hands from baby boomers to Generation X and millennials. The generational shift in wealth has made younger investors a desirable demographic for not only growing a firm’s AUM, but also maintaining it as wealth leaves existing clients’ hands and is left to this new group of investors. If your RIA is not already looking at ways to capitalize on this future asset base, now is the time to start. Begin the process by building relationships with your current clients’ children or heirs.
  1. Recruit new talent. The industry is experiencing a talent shortage, and the need to attract new advisers has never been greater. The number of financial advisers over age 70 exceeds the number who are under 30, according to a recent piece by Financial Planning. A new wave of talent will help your business attract new clientele, producing a snowball effect of opportunity for your RIA to grow AUM as these young professionals pick up steam in their careers and, simultaneously, their investable wealth. Also, don’t underestimate the importance of diversity. Women control more than half of American personal wealth, and 70 percent of women would prefer to work with a female adviser. Not sure where to start? Revisit our post on tips to attract and retain millennial female advisers.

Adapting to society’s evolving demands will help your firm traverse the great generational shift in wealth and carry your business to new heights long after your own retirement. But only the RIAs who know how to position their business to attract new clients will survive these changing times.

RIAs, take heed, “for he that gets hurt will be he who has stalled. There’s a battle outside and it’s ragin’…for the times they are a-changin’.”