4 Time-Wasting Mistakes That Limit Your Firm's Growth

The financial advice industry is a highly competitive and complex landscape. Achieving sustainable growth, while challenging, is crucial for long-term success and the growth of a practice.

A Schwab study highlighted that 75% of advisors polled reported that growth made their operations more complex — but if they could automate or streamline time-consuming activities, they would utilize the newfound time to boost growth by spending more time with clients (69% said this), prospecting for new clients (62%) and offering more services (33%).

While many registered investment advisors believe they are growing organically, it is essential to look beyond the surface and examine the underlying factors driving expansion of their business. Is the growth solely attributable to market returns? Are there strategic operational practices at play? Is the firm onboarding more clients in the accumulation phase of their retirement planning versus the decumulation phase?

By addressing operational challenges and leveraging automation, RIAs can optimize their efficiency, enhance the client experience and unlock new opportunities. Streamlining operations is a critical component of organic growth, yet many RIAs falter at this critical step. Let’s examine some common pitfalls that RIAs can overcome to avoid stagnation and ignite growth.

1. Choosing the Wrong Software

Automating back-office tasks and other operational work can give advisors more time to build their book of business. However, a Cerulli poll on the challenges facing advisors found that choosing the wrong software platform can be an enormous impediment to growth — with up to 77% of RIAs admitting to having difficulty selecting, maintaining and integrating technology.

If not done thoughtfully, this process can lead to clutter and noise that impedes progress. When navigating the tech landscape, RIAs must take the time to vet and find software solutions that best fit their practice’s needs. Uninformed decisions can create more problems than solutions — RIAs should avoid software that creates more questions than answers.

While it may be tempting to rush into a decision in an effort to mitigate costs or hit deadlines more quickly, it is important to conduct proper due diligence. This deliberate and intentional approach will pay off in the long run, allowing advisors to run their practice functionally without disruption.

The right technology can make all the difference when it comes to streamlining operations and powering growth for a practice. By carefully considering all potential options, RIAs can ensure they select a compatible solution for their business needs while avoiding unnecessary clutter and confusion.

Doing so will allow them to focus on what matters most — providing unbeatable service to clients while growing their business organically.

2. Overloading on Tech Tools

Scale, efficiency and data accuracy can all be compromised when integrating too much software into an RIA practice. Advisors attempting to utilize different tech solutions for each use case (CRM, portfolio accounting, third-party billing, aggregation and financial planning) can quickly be overwhelmed and miss out on all of the functionality that the tech entails.

An all-encompassing solution could be the answer, freeing up an advisor’s time that could be better spent on providing value-added services to clients or growing the business in other ways.

Not only does using multiple software solutions increase complexity but it also increases costs associated with onboarding new clients and servicing existing ones. Each piece of technology has its own cost structure, which means additional fees may need to be factored in when budgeting for a practice’s operations.