The Oasis Group, in collaboration with AdvisorEngine Portfolio Solutions, Inc. (AEPS), has released a new whitepaper examining the operational challenges confronting registered investment advisors (RIAs) managing between $100 million and $1 billion in assets under management.
Titled “Scale to Win: Examining the RIA Growth Model,” the report outlines what the firms describe as an “operational paradox” – a situation where business growth increasingly burdens advisory firms with administrative complexity that ultimately slows further expansion.
According to the study, as RIAs acquire more clients and assets, principals often become consumed by non-revenue-generating operational tasks such as portfolio rebalancing, trade execution, compliance oversight, and technology administration.
“The paradox compounds; each new client adds administrative load that current operating models absorb imperfectly,” said The Oasis Group CEO John O’Connell.. “Principals find they are not building a firm; they are buying time in six-month increments against a problem that requires a fundamental shift in the operating model.”
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The whitepaper cites benchmarking data from Fidelity Investments showing that smaller RIAs often face advisory expenses equal to 82% of revenue, leaving operating margins at just 18%. By contrast, higher-performing firms reportedly maintain overhead near 25.7% of revenue while serving significantly more clients per advisor.
The report argues that one of the most effective ways for RIAs to improve scalability is through a combination of workflow automation and outsourcing investment operations using turnkey asset management programs (TAMPs).
AEPS highlighted capabilities including automated tax-loss harvesting, customizable transition rules, lot-level tracking, and flexible portfolio management tools designed to reduce operational burdens while allowing advisors to maintain strategic oversight.
“Advisors don’t need to work harder; they should benefit from infrastructure that handles complexity without removing their judgment,” said Rich Cancro. “We believe RIAs derive the highest value from serving clients well and developing and engaging with prospects.”
The study identified several operational and financial benefits associated with outsourcing and automation strategies:
- Advisors who outsource investment management reportedly recover eight to nine hours per week, effectively reclaiming nearly an entire workweek each month.
- Firms with approximately $250 million in assets under management may reduce investment operations costs significantly compared with maintaining fully in-house operations.
- Modernized infrastructure can help smaller independent firms compete more effectively with larger consolidators and aggregator firms that possess greater technology budgets.
The report also notes that ongoing consolidation and merger-and-acquisition activity across the wealth management industry is placing additional pressure on RIAs to modernize operations and reduce dependence on key individuals.
“The longer a firm delays operational restructuring, the narrower its strategic options become,” O’Connell warned. “You either build an operating model that scales, or you continue running one that trades operating inefficiency for the illusion of control.”
Beyond operational efficiency, the paper suggests that improved margins from automation and outsourcing can create additional capital for business development and client acquisition initiatives.
“This reclaimed margin can be funneled directly into marketing resources, allowing an advisory practice to elevate its growth curve and scale more aggressively,” Cancro added.
The whitepaper is part of an ongoing thought leadership collaboration between The Oasis Group and AdvisorEngine affiliates focused on technology modernization, AI adoption, and operational transformation within the wealth management industry.
AdvisorEngine will also host a webinar on May 28 featuring O’Connell and Ned Dane to discuss the report’s findings and operational frameworks for RIAs navigating growth challenges
