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Is it Scalable?

Sooner or later most successful RIA/wealth management firms hit a growth plateau that seems impossible to move beyond. It usually stems from the inability to attract new customers from outside a firm’s traditional, but now saturated market niche.

One way to avoid such a situation is to look at the problem not solely as a marketing issue but as a manufacturing one as well. Perhaps even as a firm is growing it would be helpful to view manufacturing, product development, and even distribution from the standpoint of scalability.
Of course many wealth management firms have taken steps in this direction, often developing an investment vehicle or strategy suitable for third party or institutional market distribution. But these efforts are typically opportunistic, rather than integral to an ongoing growth strategy.

We recommend keeping scalability in mind as an operating principle behind all activities even before the low hanging market fruit is exhausted. Management should continuously be asking “What can we do?” or “What do we already do?” that can be easily ramped up and distributed to a broader market. And, conversely, “From a strategic point of view, should we do things in the future that are not likely to be scalable over time?” While it may be impossible to completely avoid the scalability conundrum, looking at the bigger picture from the start may help your organization avoid learning some costly lessons down the line.