Organic Growth With Limited Resources

You Want Organic Growth. Your Resources Are Limited. How Do You Choose A Path Forward?
Yelena Melamed, Head of Product, Catchlight
Yelena Melamed, Head of Product, Catchlight

Growing an RIA requires a firm to invest in itself. But for many firms, deciding where to place bets may be easier said than done.

I speak with advisory firms quite often. Determining how to approach, measure and invest in organic growth is a top priority for many. Some firms have wisely invested in strong foundations for their growth strategy, tech stacks and team. Others are taking a more cautious approach either due to fewer resources or competing strategies, making small investments in tech and their team, incrementally testing different solutions and processes to see what may yield results.

The opportunity cost can be high if a firm invests in technology but does not have the thoughtful strategy or right talent to operate it. Conversely, a high caliber team without the right tech may struggle to deliver to their potential. Simply put, the right path starts with a strategy tied to the desired outcomes for the firm and a data-driven approach to what benchmarks the firm is seeking to exceed.

The opportunity cost can be high if a firm invests in technology but does not have the thoughtful strategy or right talent to operate it.

Think about these questions: What’s your ideal client profile (ICP)? What’s your conversion rate today with your ICP? Where do your best leads come from? How much should you invest into your current lead generation channels or should you diversify?

Three Bottlenecks To Growth

You can’t pick a solution without understanding the problem. If your organic growth rate is not where you’d like it to be, take a look at how your firm approaches every step of the organic growth funnel – sourcing, qualifying and engaging leads.

In my experience, lead sourcing and research tend to be the biggest organic growth bottlenecks for RIAs. While lead sources are diverse, so is their outcome. It’s difficult to understand how to identify those that generate volume and qualify them in a way that aligns with the firm’s desired outcomes. In addition, we found the average advisor spends six hours a week on lead research, trawling social media and search sites to vet their potential prospects.

What qualifies a prospect for your firm versus another?

It can take a long time to find a good fit, but may take even longer if the RIA doesn’t know what “a good fit” means for their business. Put another way, what qualifies a prospect for your firm versus another? Firms in high growth mode tend to find more success when they define their ICP. Are there account minimums you require? Are there particular groups, interests or demographics that you are uniquely well-suited to serve? Do you focus on specific wealth segments?  Answering these and similar questions can help a firm dial in lead acquisition and spend less time on qualification.

They aren’t easy questions to answer, but they lead directly into the third bottleneck that RIAs face in their organic growth efforts: engagement. To win the interest and eventual business of a prospect, you have to know what they seek and demonstrate you can serve that need better than anyone else. In other words, find the right message for the right recipient. It takes a lot of time to craft your outreach to directly speak to the target, and even more time when you struggle to understand the target or to map your ideal client to your business’s core strengths.

Weighing Tech Solutions

Setting your strategy and understanding your specific growth bottlenecks is half the battle, but it can help make the other half – deciding where to invest your RIA’s resources – more straightforward. In some instances, a key hire can drive a firm’s growth by centralizing expertise around business development, lead generation or prospect nurturing, as examples. But many of the growth bottlenecks I discussed can’t be solved efficiently by simply throwing more people at them. There may not be enough hours in the year for manual prospecting, so firms should look to automation.

You can evaluate your would-be technology partners based on how closely they address your pain points.

This is where technology can play a role. When you have drilled down to discover the specific bottlenecks in your growth funnel, you can evaluate your would-be technology partners based on how closely they address your pain points. For example, engaging with and buying leads from a lead provider may not be efficient if you are casting a wide net, versus homing in on leads that match your ideal client profile.

The tech should fit into your existing workflows and tech stack as seamlessly as possible. Advisor tools have come a long way, and RIAs should expect smooth integration and interoperability with the solutions they already use. That said, no two RIAs are alike. If a would-be solution is almost a good fit, gauge the vendor’s willingness to add the necessary changes to their development roadmap. Talk to other users. Ask them how your potential vendor integrated with their tech stack and improved those integrations over time.

If you aren’t satisfied with your conversion rates or pace of growth, and frustrated at limited resources to address them, you aren’t alone. I talk to many RIA leaders who grapple with the same challenges. They worry about the opportunity cost of investing in a bad solution. The ones who break through realize that organic growth is an engine with many moving parts and find answers that target the specific areas that trouble them most.

Yelena Melamed is Head of Product at wealthtech firm Catchlight.

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