99.9 percent of RIAs are ‘monkey see, monkey do’: Joe Duran

Industry icon and pioneer Joe Duran has one goal in mind when he addresses advisors attending the RIA Connect New York event next month – helping them be competitive in a changing world.

“It's been very easy to grow over the last couple of decades because there weren't enough financial planners to cater to the needs of the folks who had to deal with their own financial plans in the 1990s through the 2010s,” Duran says. “The importance now of managing and delivering on your brand, ensuring that you have a truly exceptional and memorable client experience, and that you have operational excellence so you can be competitive … the pressures are much greater than ever.”

Duran, who founded national RIA United Capital in 2005 and sold it to Goldman Sachs in 2019, will be the keynote speaker at the April 16 conference.

Duran, who founded and now serves as executive managing director of Rise Growth Partners, says RIAs have become “monkey see, monkey do,” or as he calls it, “me too.

“They literally just see what everyone else is doing and do it too,” he said, adding that firms continue to target retirees when they really should be talking to younger generations. “All the money is going to be made by targeting the Gen Xers.”

Click here to register for the RIA Connect New York conference.

The way to do that, he says, is to figure out how to differentiate oneself from what everyone else is doing. “That means you have to think about the kinds of client experiences, the challenges that that generation is dealing with, specifically, so that you can actually serve their needs and be different than everyone else.”

The problem that most firms have, Duran noted, is they’re not specific about who they help, why they help them, and what they do to help them in a different way. “We think the great opportunity now is the Gen Xer, A, and B, the very high-net-worth client – the $5 million to $25 million client that is woefully neglected in the industry.

“Most advisors today are thinking about segmentation as a two-tiered, maybe a three-tiered approach,” he said. “The reality is that there is a much more distinct client segment, which is the $5 million to $25 million, where most of the wirehouses live, that independent RIAs are not being good enough about how to work and target that segment.”  

Meanwhile, RIAs are fundamentally changing how advice is delivered and the expectations that consumers have, Duran added.

Expanding services like tax prep, estate planning, and sophisticated solutions that are integrated into the core offerings of the RIA, including scale, branding and better marketing than in the past, “makes it much harder to be competitive,” he said.

Click here to register for the RIA Connect New York conference.

Organic growth for RIAs has become much more challenging as a result of a big change in demographics. Most baby boomers have reached their peak retirement age and already have their financial planner, while “sandwich generation” Gen Xers don’t have much saved and are often dealing with aging parents at the same time they're raising a family.

 “Millennials are still in the early phases, where they really have no savings, they're just trying to buy their first house,” Duran said. “The competitive pressure to get to these clients is ever harder.”

The InvestmentNews RIA Connect New York event will take place April 16. See the full agenda and registration for the RIA Connect New York conference, as well as the special advisor rate.