Industry News
A case study in RIA financial resilience
Philip Bianchi / Apr 11, 2025
In this guest column, RIA financier and consultant Philip Bianchi models out the hypothetical market conditions under which an RIA would be thrown into payment default.
At-scale RIAs, even the most levered ones, are highly resilient businesses that should be able to withstand severe market stress.
A recent Citywire article explored the topic of how market volatility may impact the financials of RIAs and, ultimately, their ability to service their debt. While the volatility triggered by Trump’s global trade war is extreme, it is not unprecedented. Our analysis indicates that it would take a much deeper and protracted downturn worse than that of the Great Financial Crisis to stress an RIA’s financials to the point it could not service its debt.
However, the derivative impacts of this volatility, should it persist, may shake up the M&A market and create increased opportunities for client engagement, the latter possibly setting the stage for organic growth.
The table below shows two potential scenarios for a hypothetical fee-only RIA with a high net worth-oriented clientele. The first scenario illustrates that, all else held equal, the equity component of a...
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citywire ria
Apr 18, 2025
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