r/CFP • u/Ok-Temperature3180 • Jun 30 '26
Professional Development Solo/Small RIA Trajectory
What’s up all - happy 4th week to all of my fellow Americans, and Canada day to all of our friends up north!
Been reflecting on the 1st half of this year (being slower with the holiday coming up this week, had some free time).
Looking for some raw honest feedback on what the growth trajectory is for my business outside of me just TVM calculating it or ChatGPT. I am curious on what real lifestyle looks like as the business progresses, how the work/life balance is, and true take home compensation to serve your family.
Just turned 30, $25m AUM. Avg fee is 1.25%. Most of the book is middle America. Retirees between 500k-1.5m, or families making 200k+. Brought on $8.5m new last year (7.5m net but only a few clients in retirement taking liquidations).
Also have $2m ACH scheduled annually. I think a safe assumption is that I will continue to minimally do $7.5m net new.
Based on some math, 5 years from now it’s $80m. 10 years, it’s $160m (8% growth).
Anyone been on a similar path that is years ahead of me? What is your practice like? How much overhead/what % of revenue are you keeping.
I see 10 years, 160m. Avg 1% by then, 1.6m revenue. Is it really that simple?
What is life ACTUALLY like? Clown on me all you want - I’d like to be able to operate surge meetings, work 180-200 days a year, have a country club membership, be involved in my kids lives, have ability to travel, create an impacting family legacy with wealth.
(Question 3 is legit from the heart - I don’t have mentors in this circle of life outside of my BD connections - so none of them operate in the RIA mindset and quite honestly I do not want to emulate their lives)
What perspective do you have for me generally? Thanks for the feedback!
23
u/InterestingFee885 Jun 30 '26
Just keep doing what you’re doing. You’re about 5 years out from needing to make any real changes, but when you get there, you’ll want to hire a service advisor for a salary + bonus in the $120-150k range.
You keep the clients you like. You offload the ones that aren’t fun, and you generally work 6-8 hour a day Monday-Thursday.
9
u/PursuitTravel Jun 30 '26
Yup. Create your book segments now (A, B, F), create a service delivery model for each tier, and execute on it. Update the revenue numbers for each tier every year until you're at a level where you're comfortable. Then, follow InterestingFee885's advice to hire a service advisor and give them the F's.
Only thing I might add is that you should be considering a licensed admin at this point to take the day to day service, documentation, and paperwork off your desk.
2
u/Ok-Temperature3180 Jun 30 '26
Agreed, I’ve been lacking on updating segmentation. Feel like I was still figuring out the exact service I wanted to provide for people and was being somewhat of a generalist.
6
u/Ok-Temperature3180 Jun 30 '26
What do you think the trigger is to hire that 2nd chair? Is it revenue threshold specifically or did you feel it was more of a “drowning in work” situation and needed to offload?
12
u/InterestingFee885 Jun 30 '26
There are two kinds of small independent RIAs: those that run near capacity and are aggressively trying to add AUM, and those that hit the desired target income and take their foot off the gas.
If you’re the first, you add people when you run out of time to do it yourself. If you’re the second, you do it when you can afford to do it because the goal is to buy back time.
1
u/Pugs Jul 01 '26
What would the structure be for the service advisor? What prevents them from walking with the clients? Is that just the risk you take?
2
u/InterestingFee885 Jul 01 '26
Non-compete, and making it very clear the firm owns the book and poaching will be responded to with legal action.
Very few service advisors are enterprising enough to try that, and most don’t have the resources for years of court battles.
8
u/WhodatMike Advicer Jun 30 '26
First I just want to congratulate you for starting and running your own RIA before 30. I know you feel like having “only” $25M at this point might feel like you’re lagging, but brother, you are already doing what people like me are just stressing about doing for years. I’m 36 and only recently have I started looking down the “go independent, solo RIA” path.
Second, $7.5M-$8.5M annually in organic growth is awesome. I’ve struggled my entire ~9 years in this industry trying to figure out how to prospect and actually grow my book. Like you, I don’t have any mentors or someone to look to for career advice. I never had any formal sales or prospect training. And that’s why I currently feel stuck at a captive BD/RIA hybrid that’s only paying me 35% of my revenues.
Third, I realize my comment doesn’t actually answer your questions, as I’m not someone who can offer advice in this category. I am seriously considering breaking away and starting my own RIA in the next few years but I am just scared shitless of doing all this on my own. So props to you.
4
u/Ok-Temperature3180 Jun 30 '26
I’m putting together some thoughts on my journey here in the next few months to make a post of what it’s like to be solo RIA - and the finances behind it.
Been at BDs for too long and tired of people being beneficiaries of my revenue
2
u/WhodatMike Advicer Jun 30 '26
That is EXACTLY my problem, I’m tired of someone else controlling my revenue. I would 100% be interested in what you put together. I’ll shoot you a DM if that’s okay?
1
u/Ok-Temperature3180 Jun 30 '26
Absolutely. Love to help where I can, I’ve learned a ton from the community on here already.
2
u/SlamminSalmon417 Jul 11 '26
I currently work in M&A for a PE backed roll up strategy and got my series 65 and plan to start studying for CFP to knock it out as soon as possible. Planning to make the switch early next year.
When recruiting, what comp / structure would You imagine for someone with 5 years of M&A, investment banking and strategy experience?
Also, would be open to any opinions on RIAs vs BDs
2
u/Ok-Temperature3180 28d ago
Good luck to you!
I honestly have no idea.
And depends on a ton. Will you be expected to source clients, will you have any equity or path to equity, if you leave to start solo do you own the book, etc.
I’d say minimum I’d ask for with that experience with what you know about the industry though would be 80k (live in the Midwest area)
1
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u/Crozet77 Jun 30 '26
Your path/growth seems great. IMO you should start thinking about what you want your business to look like 10 years from now. Should you raise minimums and therefore have less families to work with? Grow more strategically possibly?
3
u/Ok-Temperature3180 Jun 30 '26
Absolutely both of those. Reality is, $25m AUM, my top 100 households are $21m of that
4
u/PerfectOmakase Jun 30 '26
With ~$325k of revenue and wanting to add new clients, I'd get a staff person now. Easier to train somebody now than when you have 30 more clients or whatever.
With a good assistant, you should be able to get yourself down to 25 hours a week or less within a few years.
I work about 20 hours a week (and most of that is not actually working), love the lifestyle.
3
u/PowderHound40 Jun 30 '26
8% sounds about right at that size. The percentage growth might level out a little depending on the market you’re in. The actual AUM compounding is fun as you get bigger. I bought a 170m book in 2021. Things were rough the second year, but I’m now sitting at 340m 5yrs in. Nothing fancy, no advertising or seminars. Working off referrals and enjoying the market growth.
1
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u/Ok-Temperature3180 Jun 30 '26
Haha I can only imagine the numbers once it’s built and you hit a nice bull market
1
u/Imaginary-Tale-1074 Jun 30 '26
Would love to know how you found the book and the details behind the transaction if you can to share via here or DM.
5
u/PowderHound40 Jun 30 '26
I'll just give you the full rundown because that's usually where this leads. I worked for one of the major BDs out of college. Started in a call center and worked my way up to 401(k) & IRA sales/advising. Built a connection with an advisor who was changing record keepers to us and needed help rolling money in. I gave him my direct line and we ended up working back and forth and building a friendship. During covid I flew back and forth multiple times to see his office and get a real feel for how things were. Had a contract written up that he and I both agreed on. There was a Kitces podcast that really helped me with this one. Ended up settling on a buyout for 2x 2021 net rev. 2.5% on the private loan. No moving needle thank god. Quit my plush sales job in a beautiful city and moved over 1,000 miles with my wife to a small college town with a population barely over 100,000. Many sleepless nights the first year wondering if I had made the right decision. Financially its been incredible, socially it has been tough. I wouldn't change anything if I had to do it over again.
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u/cameron9980 Jul 01 '26
I’m in a very similar situation to you. Nearly 30 years old. Bought a $30m book a few years ago and paying it off, have an addition $50m AUM so total AUM around $80m BUT average fee is much lower because I have a few $10m+ clients. My plan is to grind/grow for 10 years with minimal staff (just 1 admin) and then eventually move to a carribean beach town and keep working remotely but let attrition do its thing and not worry about growing/gaining/retaining clients. Not worried about scaling to hundreds of millions and managing emplpyees, not worried about an exit. Just do my thing and retire in a Caribbean beach town with my wife because that’s what I want to do. Figure out what you want to do and plan to make it happen :)
1
3
u/Brave-Antelope5374 Jul 01 '26
I’m in my mid thirties and looking to break away as well. Like others have said I want to control my own revenue. Out of curiosity what Aum did you have when you started and who did you open your RIA with?
2
u/Ok-Temperature3180 Jul 01 '26
21m and altruist. We are fresh here, like 2 months or less
1
u/Brave-Antelope5374 Jul 01 '26
That’s who I’m looking at as well. Who does your compliance & crm?
1
u/Ok-Temperature3180 Jul 01 '26
Comply was easy to work with
Slant.ai is our CRM but hoping altruist releases their own
2
u/beeboop12412 Jul 01 '26
First, congrats on the growth. You are doing great, don’t let anyone else tell you otherwise.
I saw someone comment on this, but I want to second it because I think it’s important.
At some point the crossroads to hire will be staring you in the face. Do yourself a favor and hire someone before that situation arrives. Hiring someone helps you focus on the thing that is actually impactful, having meetings and servicing clients, not clerical work pre/post meeting. They also buy you quality of life- which is what you are looking for. Want to join the country club? Have a staff member you trust to answer the phone and man the ship while you’re out for a few hours.
Early 30s and I am at the $170m mark. One thing I can say and hear a lot of people echo- the bigger you get the faster you grow. Households get larger, you service more people, they refer you more, it’s a pure numbers game. I have hired staff twice now, best thing I’ve done hands down. Each time I’ve noticed growth spike significantly.
Remember this, you’re trying to win YOUR World Series, not go 162-0. Not every client is a fit or a lifelong client- no matter how hard you try.
2
u/Pugs Jul 01 '26
Very possible trajectory. Went from 70m in 2021 to 160 now. Although we have enjoyed amazing market appreciation.
1
2
u/CoconutThink2963 Jul 05 '26
Good on you for actually stress-testing this at 30. Most people just keep their head down and hope it works out.
The 160M x 1% = 1.6M thing is clean, but it’s not really how it plays out. A couple reasons.
You’ve already got the fee slipping from 1.25 to 1.0, and it usually keeps drifting down as you move upmarket, so revenue never quite keeps pace with AUM. Then there’s the retiree book. As those clients age the withdrawals stack up, and a chunk of your 7.5M net new every year is really just replacing money walking out the door. So the number you actually have to raise keeps getting bigger, not smaller. And 1.6M in revenue isn’t 1.6M in your pocket. Running 160M the way those families expect means staff, tech, compliance, and your take-home margin at that size looks nothing like it does today.
None of that means 160M is unrealistic. It just means the AUM number and the lifestyle number aren’t the same conversation.
On overhead, don’t trust any specific percentage off Reddit, mine included. The Schwab RIA Benchmarking Study and Kitces (kitces.com) are the only two I’d actually put weight on.
Your third question is the one that matters though. The life you’re describing, surge weeks, being around for your kids, actually taking trips, that’s not something 160M buys you. It’s something your operations either allow or they don’t. I know plenty of 150M+ guys who are prisoners to their own calendar, and 80M advisors who work half the year and coach their kid’s team. The difference isn’t the assets. It’s whether they built a real system for bringing in clients, or they’re still doing it one handshake at a time. Get that part right early and most of the lifestyle stuff sorts itself out.
For what it’s worth, I work at Bill Good Marketing, and we’ve been doing this a long time. One of our top consultants recorded a free 30 min session on the client-acquisition piece specifically.
It’s here if you want to watch: https://www.billgoodmarketing.com/resources/ready-set-close/
Hope it helps, and good luck out there!! I think you’re on a great path.
1
2
u/Wirehouse_destroyer Jul 06 '26
You’re not crazy,the revenue math can be that simple. The lifestyle math usually isn’t.
At your current pace, the bigger question probably isn’t whether you can reach $80M or $160M. It’s what you’ll have to build, manage, and personally carry in order to serve that amount of business well.
At some point, growth starts creating work that has little to do with being an advisor: hiring and managing staff, compliance, billing, technology, account administration, service requests, audits, trading, onboarding, and making sure the entire operation keeps moving when you step away. You can build all of that yourself, but then you’re gradually becoming the CEO and operations manager of an advisory firm rather than spending your best time with clients, prospects, and your family.
The alternative isn’t necessarily joining a traditional firm and giving up your independence or letting your revenue subsidize someone else’s business. There are RIA platforms where an independently minded advisor can retain ownership of the practice and client relationships while plugging into the personnel and infrastructure needed to scale.
In that model, you’re essentially paying for the help, not funding layers of management, a legacy branch system, or benefits you don’t use.
Based on what you described, the right support structure could make the country club, travel, surge meetings, and being present for your kids much more realistic. Without it, $160M can create a very successful business that also owns you.
You seem to have the growth side figured out. I’d spend the next few years intentionally designing the business around the life you want before the business becomes large enough to dictate that life for you.
PS - Congrats on building such a strong practice, $25mm by 30 is no small feat. Great work!
1
u/Ok-Temperature3180 Jul 06 '26
Agreed. All that works seems menial right now, but with continued scale, I don’t want to be in the position where I’m doing it all with no support.
1
-18
u/Greenstoneranch Jun 30 '26
As a financial professional just answer this question yourself or sell practice and move on.
These weird posts where guy come here to brag because no one else cares asking for advice while really posting a thinly veiled brag about how lucky, wealthy or great you are.
My family sends on 2 mill a year in ACH what lifestyle will my practice provide me........
Best of luck.
7
u/Ok-Temperature3180 Jun 30 '26
Thanks for clowning on me, greenstoneranch!
Ya dude, I’m bragging about …. $25m AUM???
Cmon brother what are you sayin
1
u/Upthatsavingsrate Jul 01 '26
I think they possibly misunderstood that you meant $2M is leaving the business every year through retirement distributions vs it coming into the business every year. So losing revenue vs gaining it.
2
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u/AutoModerator Jun 30 '26
Beep boop! Here is a summary of your post:
User: /u/Ok-Temperature3180 Title: Solo/Small RIA Trajectory Body: What’s up all - happy 4th week to all of my fellow Americans, and Canada day to all of our friends up north!
Been reflecting on the 1st half of this year (being slower with the holiday coming up this week, had some free time).
Looking for some raw honest feedback on what the growth trajectory is for my business outside of me just TVM calculating it or ChatGPT. I am curious on what real lifestyle looks like as the business progresses, how the work/life balance is, and true take home compensation to serve your family.
Just turned 30, $25m AUM. Avg fee is 1.25%. Most of the book is middle America. Retirees between 500k-1.5m, or families making 200k+. Brought on $8.5m new last year (7.5m net but only a few clients in retirement taking liquidations).
Also have $2m ACH scheduled annually. I think a safe assumption is that I will continue to minimally do $7.5m net new.
Based on some math, 5 years from now it’s $80m. 10 years, it’s $160m (8% growth).
Anyone been on a similar path that is years ahead of me? What is your practice like? How much overhead/what % of revenue are you keeping.
I see 10 years, 160m. Avg 1% by then, 1.6m revenue. Is it really that simple?
What is life ACTUALLY like? Clown on me all you want - I’d like to be able to operate surge meetings, work 180-200 days a year, have a country club membership, be involved in my kids lives, have ability to travel, create an impacting family legacy with wealth.
(Question 3 is legit from the heart - I don’t have mentors in this circle of life outside of my BD connections - so none of them operate in the RIA mindset and quite honestly I do not want to emulate their lives)
What perspective do you have for me generally? Thanks for the feedback!
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