This is the latest installment of a regular column to answer questions from advisors who are considering transitioning to an RIA model. To see Brad’s previous articles, click here. To submit your question, please email Brad here.
Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.
I have been going to the same dermatology practice for over a decade.
Annual preventive skin checks have prompted me to visit the practice over a dozen times.
They are in a nice facility. The doctors are great. The front desk team is friendly. The brand is easy to remember. The insurance process is as expected.
A few years ago, though, changes started to occur. It was still in the same location, had the same brand, and had the same team members, but I could tell something different was occurring behind the scenes.
The appointment-setting process seemed to be changing; the appointment reminders were different, and the billing process started to change.
At first, these changes were frustrating. It was clear something behind the scenes was changing, and there were growing pains. The staff acknowledged this as they seemed to work through their own frustrations with the change.
Considering my years-long affinity to the practice, my loyalty never wavered, and my patience was rewarded.
The new appointment-setting process is super easy to use. The appointment reminders come at a reasonable and helpful pace. The insurance process is more streamlined. The website is better.
The team took an already good practice and made it even better.
As I described in my February article related to our profession, I suspect they signed on with a shared-service provider that now handles most of the commoditized parts of running the practice.
It still has the same great team members, the same brand, etc. But the practice now runs more efficiently for both clients and their back-office operations. I suspect they can now handle far more clients using the same team footprint they had before.
The transition from point A to point B was rough, as I can attest from the client's perspective. But having worked through the hurdles, the new offering is far superior.
Would you consider a similar evolution with your advisory practice? Whether as part of an initial transition to the RIA model or an improvement to your existing practice.
Within our profession, questions remain as to whether you should:
- Outsource your asset management to a TAMP?
- Join an existing RIA vs starting your own, thus absolving yourself of the regulatory responsibility of running an RIA?
- Use a shared services provider that will manage billing, tech stack integrations, etc.?
The benefits can be fruitful:
- Accommodating more clients;
- Focusing your time on the parts of running an advisory practice you are passionate about and will lead to growth for the firm; and
- The higher enterprise value of a more systemized practice.
What stops advisory practices from making such a change?
Inertia.
Unless part of an initial transition to the RIA model, where all back-office processes are contemplated, change is intimidating. The status quo is always the easier path.
A transition to a new approach will involve hiccups. As my dermatology practice experienced, no transition is flawless. If good solution providers are involved, though, growing pains are resolved.
Finally, the time involved. Understanding what options are available, performing due diligence, and ultimately working through a transition is a time-consuming process. Queue the appeal of status quo once again!
But for those who see the value of a supported path and who have the patience to navigate a transition, the results will be enviable.
I’m sure the team at my dermatology office didn’t enjoy the transition. Having now arrived on the other side, though, I am confident they would express the same relief so many advisors post-transition in our profession do: They wish they had done it even sooner.
Brad Wales is the founder of Transition To RIA, a consulting firm uniquely focused on helping established financial advisors understand everything there is to know about WHY and HOW to transition their practice to the RIA model. Brad utilizes his nearly 20 years of industry experience, including direct RIA related roles in compliance, finance and business development, to provide independent advice regarding how advisors can benefit from the advantages of the RIA model.
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Read more articles by Brad Wales
This is the latest installment of a regular column to answer questions from advisors who are considering transitioning to an RIA model. To see Brad’s previous articles, click here. To submit your question, please email Brad here.
