A panel of registered investment advisor leaders speaking at the Wealth Management EDGE conference at The Boca Raton resort in Boca Raton, Fla., this week detailed their success in tactics such as building dedicated prospecting teams and doing niche marketing outreach to drive organic growth.
“Over the last five or 10 years, there’s an uncomfortable fact that most individual RIAs are not growing,” Gary Roth, co-CEO of Modern Wealth, told the room of advisors. “And when I say not growing, I don’t mean slow, medium-sized growth, but literally no growth.”
Roth, along with Merit Financial Advisor President Kay Lynn Mayhue, stressed the importance of building a client prospecting team and process that can feed advisors, rather than relying on them to take the time and effort to get new business.
“We started from the philosophy of centralizing a lot of the key functions for reducing friction for the advisors of getting them in front of prospects,” Roth said. “We have two actual locations and replacements for the social philosophy that we call our organic growth hub, and we have concierges whose job it is to talk to prospects and qualify them, do some data gathering, and then book appointments with the right kinds of prospects with the right advisors.”
Roth attributed the hubs, located in Kansas City and Phoenix, to helping the firm grow to more than $13 billion in assets under management after its 2023 launch. The Monterey, Calif.-based RIA is also active in acquiring advisors, with Roth noting that the organic growth setup is a draw for new advisors, partly because they can tout a 3x-stronger client growth rate for firms that have joined.
Mayhue of Atlanta-based Merit, which is also an acquisitive firm, said it has also invested in building a robust client prospecting pipeline for its advisors, giving them more time to work with clients.
“We have really focused on institutionalizing organic growth,” Mayhue said. “What does that mean in really simple terms? It means taking away the burden of finding the prospect to put on the calendar of the advisor, so not on the advisor with that ‘eat what you kill’ methodology.”
Mayhue said Merit, which is now at about $25 billion in client assets, has built out a business development team, including regional vice presidents, that meet with prospects, gather information, and put meetings on advisors’ calendars.
“There aren’t many advisors that want to sit through meeting after meeting after meeting of volume in order to get to that one out of 10 or one out of 20 clients,” she said.
James Bogart, CEO of $4 billion McLean, Va.-based Bogart Wealth, said his firm has grown to its current size solely through organic growth, using a different tactic: targeted marketing to prospects.
“We did it with just being very intentional around being subject matter experts in a niche-based, scalable marketing campaign,” Bogart said.
The firm, which started out with a strong base of ExxonMobil employees, has grown from $526 million in 2016, when it was a Morgan Stanley breakaway. Now, Bogart said they have invested in a dedicated business development team similar to Modern Wealth and Merit to delve deeper into client prospecting.
“What we learned in this process is we want to be masters of our ecosystem, whatever it is that we’re targeting, that vertical we want to be the best at, as opposed to trying to be everything to everybody,” he said. “It makes it very easy for not only our clients to work with us, but for our prospects to work for us as well.”
Roth of Modern Wealth acknowledged that many firms in the market have “reached maturity” and are not looking to grow or add clients. He said those firms are not a fit for the setup but may be looking to sell or transfer their book of business.
Inorganic growth is still certainly coming from that pool as well. According to a new forecast issued by consultancy Cerulli Associates on Wednesday, some 26,000 advisors are set to retire over the next decade, which will be the largest driver of M&A and consolidation in the sector. Cerulli also found that more than half, or 54%, of RIAs are at least evaluating a business exit strategy.
On the sidelines of the conference, Mayhue said the movement by Commonwealth Financial Network advisors after the LPL Financial acquisition caused an unexpected bump in the firm’s M&A.
“When I look back at our three-year plan that we put together, 2026 will have the types and numbers of M&A that we had anticipated over a two-year time frame,” she said. There are other non-Commonwealth firms that are joining us, but I would say they’re the reason for this condensed time period.”
Mayhue said the firms are a good fit for Merit because they are generally “young leaders with entrepreneurial-minded individuals” and have second-generation advisors.
She also said that Merit had pivoted to build its integration team to bring on the new teams, including about 10 internal promotions focused on that area.
LPL Financial leaders said in April that it had retained Commonwealth assets at a mid-80% level. Commonwealth had about $285 billion in client assets at the time the deal was announced.
