Question for Independent RIAs Doing Mainly Portfolio Management for Clients

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ilikecoffee's picture
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Joined: 2010-06-22

I've been self employed for about 2 years now. My business consists of managing separate accounts for clients - some high net worth and some not so. I don't customize investments based on client profile - I have a number of quantitative programs and the clients can invest in one or more of them.The business is pretty small still - between $1 and $1.5m in client assets, and I charge a 2% management fee. Obviously this is not enough revenue to support me and my family. I have another business which is my main source of revenue for now.My question is how do RIA's raise assets for this type of business? I know that financial planner type RIA's rely on referrals, etc and generate fees based on volume of securities sold. I have acquired some clients through referrals, but that's rare for me. What are some ways a business like mine can raise assets? Is cold calling appropriate? What if I printed a glossy brochure with audited model account performances and did direct mailing to target prospects (my programs have good track records going back to Jan 2007).Any suggestions and real-life examples would be much appreciated. Thanks in advance.

N.D.'s picture
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Joined: 2009-07-13

I would print off some flyers and put em under the windshield wipers of cars at the Walmart

ilikecoffee's picture
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Joined: 2010-06-22

N.D. wrote:I would print off some flyers and put em under the windshield wipers of cars at the WalmartAwesome idea! But I think most of the patrons my local Wal-Mart would not meet my net worth requirement.

N.D.'s picture
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Joined: 2009-07-13

I must have been wrong by guessing you had already tried traditional prospecting methods. If not then try all the traditional ways first. You can search them by using RR's search feature noted below:

Magician's picture
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Joined: 2008-05-19

Unless you only have one client, you really don't have any high net worth clients, and the patrons and Wal-Mart might meet your net worth requirement.

ilikecoffee's picture
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Joined: 2010-06-22

I was talking about the Wal-mart clients only half jokingly. But if there was any possibility of acquiring new clients I'd seriously think about it. And I think the mall cop would be on my tail.As N.D. suggested, I searched through the forums on money raising. It looks like most of you guys are on the phone all day making like 100 to 400 calls a day??!! This seems brutal. There's got to be a less "pedestrian" way to do it by targeting the right audience.I do want to explore the mass mailing option to targeted prospects. I think it would have a hit rate way higher than cold calling on the phone. 

N.D.'s picture
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Joined: 2009-07-13

Think how you would prefer to be approached by an intangible sales person and try that method. It may be comfortable to you as compared to bangin the phones.

B24's picture
B24
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Joined: 2008-07-08

ilikecoffee wrote:I was talking about the Wal-mart clients only half jokingly. But if there was any possibility of acquiring new clients I'd seriously think about it. And I think the mall cop would be on my tail.As N.D. suggested, I searched through the forums on money raising. It looks like most of you guys are on the phone all day making like 100 to 400 calls a day??!! This seems brutal. There's got to be a less "pedestrian" way to do it by targeting the right audience.I do want to explore the mass mailing option to targeted prospects. I think it would have a hit rate way higher than cold calling on the phone.Really? Based on what evidence?  Not to be condescending, but if you compared mailing to 5000 people vs. calling 5000 people, I can GUARANTEE you that your results from calling that many people would be higher by a WIDE margin, and you would spend a FRACTION of the cost that it would to do a throw-away mailer.Having said that, I HATE cold calling, so I am not saying it's for everyone.  But seriously, do NOT hang your hat on sending out mailers.  It may be a very expensive disappointment.

loneMADman's picture
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Joined: 2010-05-10

Agree with B24.  Mass mailing has a VERY low hit rate and I suspect it would be even lower for a relationship business like investment management.  If you don't like cold calling, then spend the money you would have on the mass mailing on some memberships and network like mad.  If you simply don't like talking to people you don't know, well get over it or choose a different career.

ilikecoffee's picture
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Joined: 2010-06-22

Point noted about low hit rate for mass mailings. It's not that I don't enjoy taking to people - I do. But I do not know how my pitch will be received by any random person who picks up the phone. For those of you associated with a household name such as Raymond James or similar, once you say "My name is ____ and I'm with _____" there's instant credibility. I'm however a one man shop with a generic unknown LLC name. And the other problem is I'm trying to pitch my own investment programs to them, as opposed to well known products such as mutual funds, bonds, etc. Any ideas how I could phrase my pitch? Once I pass my series 65 (which I'm almost done studying) I've decided to give cold calling a try. 

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