HomePrivate WealthArticlesOptimizing Education And M&A In RIA Management

Optimizing Education And M&A In RIA Management

Brandon Kawal is the principal of Advisor Growth Strategies (AGS). Prior to joining the AGS in 2014, Kawal served as an investment consultant and advisor services acquisition strategy manager at Charles Schwab for five years. He is currently responsible for leading client engagements, thought leadership and research for AGS.

Russ Alan Prince: Why is RIA education so crucial in today’s competitive environment? What does education mean for advisors and their clients?

Brandon Kawal: I’m a firm believer that continuing education beyond certification, regardless of credentials, is crucial for any registered investment advisor—RIA—looking to evolve within the industry. The pace of competition is evolving faster today than ever, and the growth of the industry as a whole will only continue.

The unprecedented growth of the largest industry platforms is evident when considering their diverse capabilities acquired through building or acquiring other firms. This level of expansion, along with their ability to attract a significant number of new investors, marks a notable shift within the RIA industry. These firms are rapidly bringing in new business and are pushing to maintain best-in-class organic growth rates.

Once you factor in new technology, changing labor and the human capital environment, it’s crucial to be educated on what’s happening, what tactics are successful, what strategies are winning, and what isn’t—otherwise, you’ll be left behind. While some smaller firms might not want to grow their business to the scale of a larger firm, it still pays to be educated on what those firms are doing right, as you are still competing against other enterprises like banks, wirehouses and other national registered advisors with institutional marketing capabilities.

It’s important to understand exactly where you fit within the ecosystem, and there’s always room for improvement. Further education allows for better growth outcomes for your firm. It’s all about attraction and retention—clients and employees want to be a part of a firm that has a compelling growth story. You can’t turn a blind eye to how this industry is evolving, and continuing formal education demonstrates to your clients and your team that you’re staying up to date on the cutting edge of advice.

What education means for advisors and their clients is that advisors are gearing themselves towards providing better service and advice. There will always be more to learn, and joining study group workshops or industry events will help improve and advance your industry knowledge. In avoiding educational advancements, you risk falling behind these evolutions and losing a competitive edge.

Prince: How does ongoing education help financial advisors win in a tight labor market and robust M&A environment?

Kawal: At its core, ongoing education raises your knowledge and keeps you on the forefront of what’s happening. It’s a good signal to your clients and team that you’re not missing any big changes in the regulatory environment. RIA M&A has set records in the past few years, and we have seen talent become the number one issue for many RIAs. Education puts firms on the offensive versus reacting when it is too late.

At Advisor Growth Strategies, one thing we stress to help advisors win in the tight M&A labor market is that knowledge is more accessible now than it ever was before. You’re either trying to stand out as a seller, or you’re trying to stand out as a buyer, and education informs what makes you different.

Exploring a variety of education sources, both traditional and non-traditional, provides valuable insights on enhancing the appeal of your business, regardless of your intended goals. In today’s highly competitive landscape, much of this effort is channeled into sales. Education allows RIAs to stay on the cutting edge of what’s working to ensure sustainable growth and maximum optionality with the business.

Prince: In your opinion, where does traditional RIA education fall short?

Kawal: I think traditional RIA education is still very focused on the practice side of things, especially in the development realm. Many programs focus on education on investments and practice management, but there is more work to be done on business building. There is a lack of training on compensation, equity and career pathing. I’m constantly asking myself what it means to build real enterprise value and how I can professionally develop my team and grow within the business.

In looking for education, specifically regarding business building, I am trying to find development programs that catch up with the direction of where the industry is growing. Education falls short in the sense that there is no urgency in educating RIA owners to become better business builders vs. great practitioners. There’s always going to be a place for great practitioners in this space, but if you look at the trend of where the industry is going, there’s concentration at the top with larger firms getting bigger. They’re swiftly professionalizing, so there will be greater distinctions between the mega-platforms, large regional players, and smaller practices. Ultimately, you will have to choose either explicitly or implicitly which route you will align yourself with. Education has to be tailored around helping advisors decide what businesses they want to build.

Russ Alan Prince is the executive director of Private Wealth magazine and chief content officer for High-Net-Worth Genius. He is a strategist for family offices and the ultra-wealthy.


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