Does your RIA need to hire? You have options.

Is your next "employee" a technology partner?

Count yourself in the select group of investment advisor representatives whose RIAs are growing. Well done! However, your success comes with challenges, and one you are likely facing is how to scale your business by adding new staff.

According to Charles Schwab, based on current growth rates and the number of RIAs, the industry will need to hire more than 70,000 new staff over the next five years, without accounting for any attrition, retirements or new firms.

You have needs. You have options.

At some point, the volume of work and support required to keep pace with your growing practice will overwhelm your existing staff. It is then that many advisors react by quickly hiring a new employee to fill the gap of their greatest pain point. But recruiting, interviewing, and hiring a new staff member should be a secondary consideration in your plans to scale for growth. First, it is vital to evaluate your current firm's structure and explore the outsourcing option before hiring a new employee.

This post looks at both direct hiring and outsourcing approaches to help you make the most well-informed decision for your RIA.

The direct hire approach.

Once you have determined you need to hire, you will want to have a disciplined evaluation process in place. Following that process will help you attract qualified candidates, assess their experience and capabilities properly, and ensure your final selection is a good fit within your culture. You will also need support from your current employees to help assist in recruiting and interviewing.

And even though you may feel a need to hire someone quickly, you should commit to being patient and thorough in your search for the right employee. Ultimately, they will be an extension of your brand that can either enhance or harm your relationships with current clients and potential prospects.

Your greatest need?

Many of the most well-known RIA firms wrestle with identifying and prioritizing which open positions are most critical. In Charles Schwab's 2024 RIA Benchmarking study, 73% of RIA firms indicated that they had plans to hire in 2024, with the media firm planning to hire 4 new roles in the next 5 years. Even though your practice may be smaller than these larger firms, your needs are often similar. 

Some roles in particular can help a firm scale and keep pace with their growth, especially:

1. Client Services, which can enhance client stickiness
2. Operations, which can find gains through automation
3. Administrative Assistants, which can relieve senior leads of pesky distractions

You might be feeling gaps in those areas as well. And while larger firms may have the financial wherewithal to fill several positions, you might be able only to afford one person. That is why it is vital to know which needed skills are most critical to help solve your current challenges and which will provide enduring value to your practice.

Do not forget compliance.

As your employee count grows, keep in mind your regulatory and supervisory responsibilities are likely to increase as well. Supervising the activities of your staff can become a time thief that limits your availability for client and prospect needs. You also will need to determine if a new employee requires registration as an investment advisor representative.

You can start by defining the specific functions of your new hire. Then, think about those responsibilities from the perspective of compliance oversight. Some questions to consider:

• Will your new hire have access to clients' data or non-public information?
• Will they communicate directly with clients?
• Will they have access to trading platforms or interact with third-party vendors?
• These are questions that will need to be answered.

Is there another answer?

If you feel a bit overwhelmed now knowing the time, process, and considerations you need to account for when hiring a new employee, you may wonder if there is another solution to your staffing challenge.

There certainly is, and it is one many RIAs are increasingly using with great success.

The outsourced approach.

Many of the fastest-growing RIAs rely on TAMPs for their investment platforms and third-party model portfolios. Others use a Turnkey Asset Management Platform — TAMP for short — for back-office technologies and support. But the best answer for your staffing needs may be an advisor-centric TAMP like GeoWealth, which offers all those services in a comprehensive proprietary platform that addresses the essential needs of your RIA practice.

timing:

One reason is timing. Hiring a new employee can be a laborious process. Recruiting, screening, interviewing, and onboarding a new employee can often take months and consume a lot of your time and that of your already-constrained staff. However, a full-service TAMP like GeoWealth has labor-saving technologies and support readily available that can be integrated into your practice within a few weeks.

cost:

Perhaps the most relevant advantage of outsourcing, however, is cost. As you are aware, the most significant expense in your RIA is labor. That includes wages, benefits, payroll, and other taxes. Thus, every new employee represents a substantial financial investment. Conversely, because GeoWealth owns its proprietary technology, many of the administrative and operational functions in your practice can be managed at a lower cost than if you hired a new employee for those roles.

breadth:

GeoWealth is an integrated, purpose-built technology platform that can assist you throughout every stage of the wealth management life cycle, available 24/7 through cloud access. We offer both advisor portals and client portals, all branded to your firm.

Our platform allows for the seamless delivery of both advisor-managed and third-party model portfolios, or a combination of the two. Our investment technology provides firms with the tools they need to build compliant and scalable solutions while staying ahead of their clients’ unique needs. Plus, we offer OCIO solutions and Investment Consulting Services.

In a world where the needs of clients seem to grow exponentially, GeoWealth’s holistic offering provides you and your firm the scalability to grow by easing the burden on your in-house back office and allowing you to focus on attracting new clients and growing your business.

Explore the full breadth of what GeoWealth offers RIAs, from advisor technology, to turnkey investment solutions, to full outsourced back office services.

Need to upgrade your current TAMP?

Suppose you use a TAMP now but do not believe it is helping you find efficiencies with your staffing. In that case, it might be time to audit its current services and support and also consider evaluating another TAMP like GeoWealth. There are many factors to think about in identifying the right TAMP that can indeed be your partner and help you right-size your staff, including:

• Technology
• Cost
• Flexibility
• Scalability
• Integrations
• Longevity & Innovation
• Client Experience

You can learn more about each of these attributes in our 7 Keys to Partnering with the Right TAMP guide, which you can download here. Better yet, schedule a no-obligation consultation to discuss your current staffing needs and to discover how GeoWealth might help you solve them. Who knows? You may find your next "employee" is a new technology partner.