Anthony Stich | The Principles Behind Sustainable RIA Growth

[00:00:21] Anthony Stich: Why am I there? Okay, that's a tough question. I've been in the industry now for over 20 years. Grew a few technology firms, one with an exit. And they actually saw me on stage, believe it or not, a couple times, and they reached out and said, Hey, would you wanna come help grow this RIA?

And I said, sounds like a lot of fun. Moved the whole family down to Naples, Florida. My son's gonna go to university down there. That's why I'm there.

[00:00:49] Doug Heikkinen: You excel on stage, so I can see why they reached out.

[00:00:52] Anthony Stich: Thank you.

[00:00:53] Doug Heikkinen: So as Moran Wealth Management has scaled over the past several years, as you're learning about them what principles have guided you, how are they growing?

[00:01:01] Anthony Stich: Yeah, so that's an awesome question. I think the key word there is principles, right? So it's, at Moran Wealth, it's never been about headcount or AUM. That was never the idea. It was always about the principles of client experience, investment philosophy, and planning rigor, right? Those were non-negotiables at our firm, and that's how we ultimately grew.

It wasn't about trying to grab every asset you could or acquire a firm. The idea and the spirit was if there is a similar planning rigor, investment philosophy, and of course that client experience mindset, that's how we've grown. We've applied that model to our clients and it's just like rapidly grown that way, and now we're looking at it that way with other advisory firms as well.

[00:01:46] Doug Heikkinen: We're seeing more experienced advisors reconsider the traditional wirehouse or the standalone RIA model. From your perspective, why?

[00:01:55] Anthony Stich: It's actually really interesting because I think for the last probably 15 years or so, there's been this whole banging the breakaway drum, right?

Everyone needs the breakaway from the wirehouse, and that was always the thing, right? But we, now what we're seeing is like these almost two monolithic categories. We're seeing these large wirehouses, the monoliths, and now we're seeing these rollups and these mega RIAs, and they're also monolithic of their own way.

And what's happening is these advisors are trying to break away, which is say from a wirehouse, and they want a very specific, they do it for a very specific reason, right? It could be investment philosophy, it could be quality of care. It could be the planning rigor, as we talked about before.

What they're seeing is when they break away and they start off on their own, they're burdened by cybersecurity, compliance, vendors sprawl, which is one of the worst, and just operations. Many advisors are realizing that they're really good investors, and they're really good at servicing their clients, but they might not be the best business operators.

So what we're starting to see in the industry, and we're all seeing it, is the shift of, okay, how can I offload some of those services, that back office stuff I don't wanna do, so I can be in front of my client being that noble financial advisor that I want to be. So that's what we're seeing. I think we're seeing the shift of, the wirehouse model is not working. The mega RIAs and those kind of roll-ups aren't working. And now we're starting to see these folks in the middle wanna offer high fidelity services, family office style services, but are looking to offload those back office challenges.

[00:03:24] Doug Heikkinen: Looking ahead, how are the sophisticated advisory firms gonna find their next phase of growth?

[00:03:32] Anthony Stich: So it's, we always talk about commoditization, right? We talk about fees shrinking, and even though they haven't shrunk necessarily, we're still seeing that average, what is it, a hundred bps or so? We see that average. There really isn't, the commoditization isn't happening there. What's happening is the expectations are more services.

Yeah. And that's the challenge, right? And so many of these firms that are breaking away, or they're trying to get to the next stage of growth, they can't offer the level of services that are expected by the clients at the fees they charge. So what do they have to do? They have to look for partners that can help them with estate planning functionality, right?

Family office style services, bill pay, even concierge level services. So I think what we're gonna see is those really solid, strong performing advisors that want to get the next stage of growth, and they're gonna have to look elsewhere to help them along that way. They need to align again, back to my three principles, investment philosophy planning rigor, and client experience. They need to find alignment there with firms such as Moran Wealth that can help them offer the services their clients desire to keep, to protect themselves from the wirehouses and the mega RIAs, and of course the digital revolution that we're seeing today.

[00:04:43] Doug Heikkinen: Anthony, always great to see you. Best of luck for this year and onward and enjoy Florida. It's great down there.

[00:04:49] Anthony Stich: I can't complain. Thank you so much, Doug, for having me again. Until next time.