Market appreciation and mergers and acquisitions have been the headline-grabbing forces driving the growth of RIAs in recent years. But firms focused on sustainable expansion know that they must continuously tweak and refine their organic growth strategy.

The most significant risk for any RIA business is losing clients, especially when wealth passes from one generation to the next. Historically speaking, when inheriting wealth, 90 percent of heirs choose to leave their parents’ long-term advisors. Today, the industry is undergoing the greatest generational wealth transfer in history, as an estimated $58 trillion will transfer from one generation to the next between 2007 and 2061.¹

That is why Ira Rapaport, founder and CEO of New England Private Wealth Advisors (NEPWA) and a member of Capital Group’s RIA Advisory Board, has made nurturing client relationships part of the foundation of his organic growth strategy. With approximately $2 billion under management, NEPWA has achieved a high client retention rate by focusing on the “softer side” of the business. In addition to focusing on customized portfolios, asset allocation and planning, NEPWA believes that its success depends on cultivating client relationships, hiring the right people and developing talent.

Rapaport recently spoke with us about the importance of nurturing client relationships and why this mindset is so important to achieving successful organic growth.

What are the key ingredients to your firm’s winning formula when it comes to organic growth?

When you step inside our office, you will see pictures of our employees and their families — because at our firm, taking care of people and their families is a critical measure of our success. We care deeply about our employees, our clients and their families. Attaining attractive risk-adjusted investment returns and successful planning strategies are imperative. They are not, however, all that matter to our clients.

Many of our clients seek wealth preservation for their families that can last for multiple generations. To help them achieve these goals, we spend a great deal of time talking with them to better understand their family dynamics, concerns and hopes. It is important that they know we will be with them every step of the way. In addition to discussing investment and planning strategies, we discuss what else is important to them, such as marriage, children, grandchildren and health.

In addition, we strive to hire the right people to be a part of our team long term. The low employee turnover at our firm is crucial in forming these important relationships with our clients.

How do you build these deep connections with clients, and what have you done to maintain that focus during COVID-19?

One valuable tool that we use to deepen relationships is our annual client event. We invite our clients and their family and friends to join us for a series of educational presentations followed by a reception full of food, drinks and socializing. The presentations typically involve market and investment themes, but we always try to have one speaker focus on health and wellness. The event requires extensive planning, but it further strengthens our relationships — and our clients love it.

Last year was incredibly challenging because we could not host the event in person, but we pivoted to a digital-first footing pretty seamlessly. Instead of focusing on one big client event, we held several smaller virtual events and meetings for clients. To make these events special and unique in their own way, we focused on giving our clients direct access to experts — including political, market, economic and health experts. The clients truly enjoyed the various speakers, and it allowed them to stay educated and informed during the tumultuous environment of the past year.

The structure of our team promotes strong connections with families. Each of our advisors works with approximately 50 families. This allows our team to get to know all of their clients personally and learn how to communicate with them in the ways that work best for them. We prefer not to send generic emails out to all of our clients. Instead, we take a segmented approach and tailor our communications to each client’s specific needs.

There is no question it has been different during COVID, yet the strength of our client relationships will carry us through to when we can finally be together in person once again.

Why is culture so critical to your firm's organic growth, and how do you nurture a mindset that pervades the entire business?

We aim to hire the right people — because they are by far the most valuable asset to our business. Culture is everything to our success. In addition to a general focus on hiring people who are intelligent, articulate and understand our business, most of our employees were athletes and are overachievers. They generally start in entry-level positions, and our goal is to have them advance over time to senior-level positions with their own set of clients. All team members understand that driving organic growth is the key to the success of the firm and their own careers.

We think that an advisor should be an intelligent, well-rounded person. Our ideal advisor can walk into a room full of strangers and confidently connect and communicate with everyone in the room.

This mindset also factors into how we lead our client meetings. Our client meetings typically begin with a detailed portfolio review (discussing asset allocation, investment and market themes, and planning strategies) and often end with discussions about family and other events happening in our client’s life. 

How does focusing on women contribute to your firm's success, and how does it fit your approach to building culture?

Many would argue the RIA industry hasn't done a very good job of recruiting and retaining women. But based on our experience, female clients often prefer to meet with female advisors. Our firm is pretty unique in that more than half of our employees are female. We feel that this is particularly important because at some point, most women will need to make important household financial decisions.

Women tend to outlive men and may need to make some difficult decisions when they inherit assets. We think it is important to have met with both spouses prior to a life-changing event. We try to always meet with couples together and focus on financial education and how to meet the challenges of various life milestones; this is consistent with our fiduciary responsibility and with our family-oriented approach.

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¹ _{Deloitte, “10 disruptive trends in wealth management”}