It's Not Just About Relationships: Investment-Oriented RIAs Who Find Their Niche Are Reporting Big Growth As Well

Wednesday, July 13, 2011 06:54
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It's Not Just About Relationships: Investment-Oriented RIAs Who Find Their Niche Are Reporting Big Growth As Well

Tags: asset allocation | asset management | investment advisors | portfolio construction

Insights from a recent event held by up-and-coming RIA custodian Trust Company of America: you're still relevant if your real passion is investing, and the way you interpret all the information out there can put you on the same footing as the market giants.

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Trust Company of America knows about growth first hand: the institution has evolved fast from its self-directed IRA administration roots into a full-service RIA custodian with around $10 billion on its platform.

 

In recent years, that growth has come both from capturing the attention of new affiliates and giving its existing accounts the tools to expand.

 

For example, Michael Ball's Weatherstone Capital Management has grown its assets 600% since 2007 -- a time frame when other RIAs were having trouble simply keeping their books from eroding -- through out-investing the crowd.

 

As he points out, keeping the management yourself isn't always the easy choice in this kind of market environment.

 

"If that's not really your preference, there are some pretty good options to outsource that function."


In fact, one of the stars of the Trust platform is its multi-manager unified account program, an in-house unified managed account (UMA) system that allows advisors to integrate multiple outsourced strategies into the same client portfolio. 

 

Ball is impressed with the way the system lets Trust affiliates mix and match in-house strategies with best-of-breed security selection brought in from elsewhere.

 

Likewise, Robbie Cannon built his RIA, Horizon Investments, into a $3 billion powerhouse by constantly thinking about how to best stay relevant to his clients in an increasingly complex financial landscape.

 

He's up to the challenge.

 

"Now you can invest in Peru, Brazil, really anywhere," he says.

 

"It really has changed, and you've really got to be able to find ways to remain relevant. The good thing is that in a multi-disciplinary approach there is no information edge any more -- your edge is really how you interpret the data."

 

While he doesn't say so explicitly, Cannon also hints at ways that investment-oriented advisors can scale up.

 

Instead of just buying third-party strategies, advisors who really know the markets and can build a track record of performance can sell their own proprietary models back into the system.

 

Trust Company of America's brochure tacitly allows the concept, and in a world where UMAs are gaining traction, it's definitely something to explore.

 

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