More than a billion dollars in assets may be considered a dream come true for many RIAs, but it's not without complications.
In this new phase of their business lifecycle, an RIA that crosses the $1 billion asset threshold essentially transforms from a professional practice to a functioning business, according to a new report from Cerulli Associates.
(Related: Dynasty Rolls Out Team to Aid $1B-Plus RIAs)
The new, bigger enterprise requires institutionalization of processes, centralized staff support, specialized roles and a well-defined organizational structure as a growing number of advisors are spread across multiple locations.
"RIAs need to build an entirely new set of competencies to remain competitive," according to the report. They need to attract and retain advisors, build scale across a large (larger) number of advisors, offer a consistent and positive client experience across the organization and build an executive management team often consisting of a CEO, COO, chief compliance officer and chief investment officer, Cerulli reports.
