Five key steps to grow your RIA practice

Growth-minded advisors are often bold, hardworking, and visionary. But without a plan, reality can sometimes fall short of the vision.

To step up as a well-managed and high-performing firm, many advisors develop a sustainable strategy that can help them maximize their growth today and set a path for future momentum. In fact, Schwab's 2024 RIA Benchmarking Study shows that Top Performing Firms with a strategic plan in place saw twice as much annualized revenue growth, and net asset flows contributed nearly three times more to their overall AUM growth over the past five years compared with all other firms.¹

Planning can seem hard, but it doesn't have to be. By going through an intentional process to learn about how your firm fits in the marketplace, then documenting your ideal client and firm goals, you can establish a path for growth that's right for your firm.

1. Define who you are

Advisors typically choose the RIA model with a clear sense of purpose to do right by your clients and build a practice you can be proud of.

An effective strategic plan puts who you are and what you stand for at its center. Start by identifying your firm's vision for the future, along with its purpose and values, and keep those handy as you develop your strategy so you don't lose sight of your north star. If something in your strategy doesn't feel right or isn't true to you, you might want to take a different approach.

2. Assess your situation

Next, you want to understand where your firm currently stands and how it's poised to achieve the goals you set. Evaluating your situation using the "SWOT" analysis (Strengths, Weaknesses, Opportunities and Threats) can help you get there:

• Internal – Identify the strengths and weaknesses within your firm
• External – Determine the factors outside the firm that pose either opportunities or threats

Taking time for this process will allow you to evaluate where your firm excels and identify the gaps in expertise or competence you may need to fill. It also can help you uncover opportunities for growth and prepare for barriers you may encounter.

3. Identify your ideal client

A big challenge facing many firms is determining whether a prospective client is the right fit. Growth-minded firms can be tempted to take on every prospect who walks through the door, especially if they have significant assets. But are they a good match?

To find your ideal client—a client you want to attract and for whom your firm does its best work—think about a potential relationship holistically. Ask yourself:

• Can our firm offer solutions to meet the client's particular and unique needs?
• Are we able to address the stage of life they're in as they prepare for their future?
• What is their investing proficiency?
• Does the client fully understand and value our approach?
• If they have an investment philosophy of their own, will it conflict with our firm's approach?
• Are they comfortable delegating, or will they want some level of involvement in the process?
• Is there a personality fit—will we work well together?
• Are they located in a region where we're able to serve them?

Running through this checklist can help you feel confident that a prospective client will likely be a good fit for you and your firm. For more about identifying your ideal client, read "The client of your dreams: How to find your ideal client."

4. Set goals

Goals help you maximize your plan and provide clues for what adjustments are needed along the way. It's helpful to have at least one long-term and several short-term goals that support your bigger objectives. For example, if you have a goal of merging with another firm, your more immediate goals might be to: increase margins, grow your number of clients, and improve back-office efficiency.

The "SMART" method can be a useful tool to guide you in establishing your goals. Regardless of type or size, each goal you set should be:

• Specific – Be clear and precise about exactly what it is you want to achieve
• Measurable – Set tangible metrics for how you will evaluate progress and measure success
• Attainable – Be sure your objectives are possible and within reach
• Relevant – Verify that your plan includes courses of action that are pertinent to your growth goals
• Time-bound – Establish a detailed timeline including start dates and target dates

5. Check in on your progress

Once your growth plan is in motion, schedule periodic check-ins to track your success. Identify what's moving along as planned and celebrate those successes. You may also discover that certain aspects of the plan are running up against barriers due to unpredictable forces such as internal changes at your firm or external factors in the market. Stay nimble and re-think those aspects of your plan. Having that flexibility will help you keep your overall vision from losing steam.

Not unlike investing, sustainable growth requires careful and diligent planning. No matter how bold and ambitious your growth goals are, creating a plan can help you move closer to the future you envision for your firm.

What you can do next

• If you custody with Schwab, log in to tap into our strategic planning tools and resources, including our Virtual Practice Management course, "Building Your Strategic Plan."
• Consider a custodian that is invested in your success. Contact us to learn more about the potential benefits of a Schwab custodial relationship.