RIAs Are Moving Fast to Offer HNW Services: Survey

The number of RIAs who offer services catered to the needs of high-net-worth clients and their families is growing rapidly, according to a new RIA benchmarking survey published by Raymond James.

The rate of respondents offering “family office services” more than doubled since 2023, from 20% to 41%. Similarly, respondents offering investment banking services increased from 15% to 26%, while trust services are now offered by 68% of firms — up from 48%.

The data shows that RIA firms are increasingly seeking to accommodate the more complex financial needs of high-earning and high-net-worth clients, in line with a business model that favors larger client relationships and broader service models.

While family office services are mostly provided in-house, the large majority of respondents’ firms relied on referral partnerships to provide trust and investment banking services.

Client Niches and Succession Trends

Advisors’ practices are also changing with respect to their target client niche. Compared with 2023, 69% more RIAs now say they are focused on health care professionals, while an additional 60% of respondents are focused on attorneys. Some 52% more are focused on women investors, and 50% more respondents focus on foundations and endowments.

The report suggests that advisors are growing much more aware of their succession planning needs and opportunities. Specifically, 7 in 10 respondents said they have a documented, long-term succession plan, which is a 40% improvement from 2023. Further, 87% of respondents said they have a catastrophic event plan.

Money Management

Not everything about advisors’ practice is changing as fast, however. Active portfolios remain the “bread and butter” of respondents’ portfolio strategies, with 85% of respondents reporting that they use model portfolios comprising separately managed accounts or exchange-traded funds.

This is down from 2023, when 96% of respondents said they used firm-driven model portfolios. This may reflect a change in RIA firms’ investment management styles, according to the report, but it is more likely the result of the survey now asking if respondents use mutual fund asset allocations. Some 52% report doing so.

Business Goals and Strategies

While growth and operational efficiency again lead the list of respondents’ top goals for 2024, RIA principals expressed heightened interest in technology, cybersecurity management and regulatory compliance this year.

Notably, for the first time in the survey’s four-year history, respondents said compliance requirements were the top challenge they were facing, swapping places with “growth in your RIA.”

Broadly, rates of technology use for back-office and client-facing functions remained stable compared to 2023, with most respondents reporting that they use client relationship management, financial planning, trade order management and portfolio accounting software.

Estate planning technology was the only category with a notable change in use, year-over-year, increasing by nearly a third.

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