Fight the top 5 fears of starting a RIA business

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What would you like to know

  • Starting your own RIA presents obstacles that may seem daunting, but none are intractable.
  • A recent study by Cerulli Associates found that 87% of clients prefer to stay with their financial advisor when they move to a new business.
  • Between outsourcing and hiring the right people, you’ll have time to do the parts of the job that you love.

Since 2020, the “disruption” trend among advisors has indicated a shift within the industry. Accelerated by the presence of COVID-19, financial advisers have deliberately contemplated the path to independence over the past two years with the dream of starting their own business to control their hours, goals, staff, etc.

The trend is great for the industry – advisors have forged their own path, created businesses based on their own vision, and consumers now have more options to choose from when planning their financial futures. But advisors need to get there first, and starting your own RIA business is not without its challenges.

Starting your own RIA business comes with a series of obstacles that can seem daunting, if not impossible to overcome. Some have a clear path to resolution. while others require more creative problem solving. As a new business owner, you will be faced with challenges that you have probably never faced before. The good news is that there are strategies you can use to combat these fears and propel your new RIA business to success.

We’ve named the top five fears of starting your RIA business and how you can combat them. They may seem different for every business, but none are intractable. Through strategic partnerships, daring to have big goals and trusting the process, you can pave the way for the creation of a new RIA firm.

1. Fear of the unknown

Going alone in the creation of a RIA business is scary. There is no guarantee that you or your business will be successful. Maybe you are quitting a reliable full-time job or investing time and money in a business with no promises.

You are probably an expert in financial advice, but you are inexperienced in starting and marketing a business. You might know all about building strong customer relationships, but you might not know how to build a brand. The good news is that there are experts out there who can help you jumpstart your business.

Partnering with a business consulting company allows you to ease the burden of doing everything yourself for your RIA business. Many have experience every step of the way when starting a new RIA firm and can offer their expertise to answer questions. Consult the professionals before making a decision and let their comments guide you.

Accepting feedback and advice from trusted sources can help you better understand your trajectory, making the unknown more manageable. The good news is that the failure of a newly created AIR is almost unheard of, as it is simply a transition of integrating an advisor’s financial practice into another company and transforming it into his own independent business.

2. Be concerned that your customers will not follow you.

For an RIA firm to be successful, it must have a solid client base. You want customers who are there for the long haul. There is a legitimate fear that clients of a former RIA company will not follow you into your own business. The data on this, however, has revealed that the odds of customers following you are good.

Cerulli Associates is a leading data research firm in the financial industry, and according to a recent study 87% of clients would rather stay with their investment advisor when they move to a new business rather than reestablish a relationship with a new advisor.

Depending on your current employment contract, you may or may not set aside time to have conversations with your current clients and inform them about your plans to start your own AIR business. If you are limited to doing so, there are effective strategies that can be deployed to help you be ready to communicate with your clients as soon as you are allowed to do so based on your employment contract and regulatory rules.

History says that if you have a good relationship with your current clients, they are very likely to want to continue working with you and become among the first clients of your new firm.


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