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Combating the Top 5 Fears to Starting your RIA Business

Starting your own RIA firm comes with a series of obstacles that can feel daunting and impossible to solve. Some have a clear path to resolution while others require more creative problem solving. If you’re just venturing out into independent financial management, you might be dealing with fears of your own when starting an RIA firm. You are not alone in these fears. As a new business owner, you will be met with challenges you’ve most likely never encountered before. The great news is there are strategies you can employ to combat these fears and propel your new RIA firm toward success.

We’ve named the top five fears of starting your RIA business. They might look different for each unique firm, but none are unsolvable. Through strategic partnerships, daring to have big goals, and trusting the process, you can pave your path to establishing a new RIA firm. Here, we’re delving in to offer solutions for combating these fears.

Fear of the Unknown

Setting out on your own to create a new RIA firm is scary. There is no guarantee you or your business will be successful. You might be leaving a reliable full-time job or investing time and money into an endeavor with no promises. In short, transitioning to pursue an independent RIA firm is daunting. The fear of the unknown hangs over the decision. You most likely are an expert in financial advisement, but lack experience starting and marketing a business. You might know everything about building strong relationships with clients, but be at a loss when it comes to building a brand. The good news is that there are experts out there who can help you get your business off the ground.

Partnering with someone like tru Independence allows you to lessen the burden of doing everything for your RIA firm yourself. They have experience working through each step of the process when establishing a new RIA firm and can offer their expertise to answer your questions. Consult the professionals before making a decision and allow their feedback to guide you. Accepting feedback and advice from trusted sources can help you better understand your trajectory, making the unknown feel more manageable.

Fear My Clients Won’t Follow Me

For an RIA firm to be successful, it must have a solid client base. You want clients that are there for the long term. There is a valid fear that clients from a former RIA firm will not follow you to your own company. However, data on this has revealed the odds of clients following you are good. Cerulli Associates is a premier data research company in the financial industry. According to their research, 87% of clients would rather stick with their investment advisor as they move to a new firm rather than reestablish a relationship with a new advisor. You should set time aside to have conversations with your current clients and inform them about your plans to begin your own RIA firm. If you have good relationships with your present clients, they will most likely want to keep working with you and become among the first clients at your new firm.

Along with this, you should spend time and energy marketing your new RIA firm and its services to find new clients. Start taking these steps as early as you can. This provides the perfect opportunity to make a space for your new brand in the finance industry and ample time to gain new clients in the earliest stages of your new business. Between this marketing and word-of-mouth comments from existing clients, you can build a quality reputation to attract your ideal client.

Fear of Not Enough Time

You are going to be very busy as a new business owner. Everything from managing logistics to finding new clients will fall on your plate. With all the work required to kick off a RIA firm, there might be concern of not having enough time to do everything. After all, there is only so much one person can accomplish in a day. You can troubleshoot this by outsourcing work and hiring the right people. Partnering with a company like tru Independence allows you to receive quality guidance on your business decisions and outsource work. The people at tru understand what it takes to make a RIA firm excellent and they apply these skills to certain tasks, freeing up your time to focus on the company’s larger picture.

You might also be starting with a very small team. Outsourcing work helps lighten the load while still delivering quality work. You can also focus on hiring people who are dedicated to the company’s mission. Ideally, they are hired into roles that allow them to use their strengths to further the company. Between outsourcing and hiring the right team members, you will have time to do the parts of the job that you love.

Fear of Lack of Support

The fear of not having enough support works in conjunction with the fear of not having enough time to accomplish daily tasks. Owners of RIA firms must review portfolios, manage compliance, provide office support, schedule meetings, and more. Between partnering with an external company like tru Independence and hiring employees with skills that fill holes in the company, you can ensure that your business has the proper support to reach its goals. Try periodically taking stock of where the company stands. Ask yourself what it could benefit from then take steps to accomplish it.

Another great way to combat this fear is to study your ideal client and competitors. How can you set yourself apart from the other RIA firms potential clients might consider working with? What can you offer potential clients that no one else can? By showing potential clients what makes you unique you can more effectively pitch your RIA firm as the best for your ideal client.

Fear of Isolation 

Setting out to start an independent RIA firm can be isolating. You’re no longer on a preexisting team of colleagues to support and be supported by. Having a community that supports you as you’re making important business decisions is crucial. There are a handful of ways to make sure you have this support.

First, consider having a mentor or other trusted figure who you have an established relationship with prior to starting your RIA firm. Maybe this is someone who has their own RIA firm so they can provide you with guidance as you begin down the same path. Second, hire people you trust and who you would be happy to work with everyday. Hiring quality employees who connect well with the company’s mission and other team members boosts overall company morale. A team of like-minded people will help you and everyone else at the company feel connected and supported.

There are fears that arise when starting any new business. As the owner of a new RIA firm, it’s important to remember you aren’t alone. Between outsourcing work, strategically planning your business opening, and hiring top-notch employees, you can start your business as smoothly as possible. Now that you know what obstacles lie ahead, it’s time to start taking steps toward establishing your own RIA firm.