Advisor Intelligence

Don't Get Stuck in the MIddle

 

As Jan Brady repeatedly discovered, being stuck in the middle is tough. Raymond James’ CEO Paul Reilly says the same is true with the size of financial services firms.

“What begins to be difficult is when you’re in the middle,” Reilly says. “When you’re in the middle, it’s not impossible, it’s just harder.” The extremes—boutiques and the largest firms—are able to deliver services that both advisors and clients are looking for; firms in the middle are stuck.

These firms can’t afford to keep with the training, technology and compliance support offered at the bigger firms through scale. Nor do they have a niche position and the ability to execute their business distinctly in order to draw in advisors and clients. Without those business incentives, it can be hard to attract and retain advisors, as well as clients.

“The smaller firms need to say are we going to stay focused or are we going to grow and have to compete,” Reilly says. But if you fall behind on the services offered during that growth, a firm is vulnerable.

Reilly also noted that the method in which a firm operates under—whether a broker or RIA—also has a big impact. “The cost of being RIA versus being a registered representative is significantly different,” he says.

But that’s not to say all of the mid-sized firms are doomed to failure or risk being gobbled up. Technology is really driving firms, Reilly says. With that in mind, mid-sized firms may be able to successfully leverage outside technology vendors to control costs.

 

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Diana Britton

Diana Britton is the Managing Editor of WealthManagement.com and REP. Magazine, covering asset management and independent broker/dealers from all angles. A native of Los Angeles, she now lives in...

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Megan Leonhardt is the associate editor at WealthManagement.com, covering all of the wirehouse news, as well as regulatory affairs. A business journalist with a background in the legal industry,...
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