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May 31, 2012updated 04 Apr 2017 3:39pm

Avoidable inefficiencies threaten RIAs’ profits, study

A recent study by Peshing has revealed that workflow and operations management is a prevalent problem for RIAs, more so as businesses increase in complexity.

By Verdict Staff

The report, titled Mission Possible III: Strategies to Sustain Growth in Challenging Times throws light on the challenges faced by RIAs to remain profitable.

It has been bought out by the Pershing study that in the recent years, total overhead spending by RIAs has increased 10%, while overhead expenses on a per-client basis has risen 5.2% each year between 2008 and 2010.

Kim Dellarocca, director and head of segment marketing and practice management at Pershing remarked, "The constraints of the financial crisis created a need for RIAs to streamline operations. Unfortunately, our study found that many have not adapted and are literally paying the price."

"Firms can be better at managing operating costs, especially labor costs, which can be a serious drag on the bottom line," he further added.

The report suggests three steps that will help RIAs to run their business more efficiently; identifying the ideal client profile so that success can be replicated, designing the workflow to deliver a unique and powerful client experience while creating maximum value for the firm and aligning human capital needs with the business goals through effective organizational design.

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