How to Hire, Train, Lead, and Manage for Real Success in the RIA Industry

  • Helpful Resources
  • By Gui Costin
  • Published on March 11

Have you ever felt like you should be raising money with RIAs, only to wonder whether or not it’s really worth the time and effort? Or worse, have you tried and failed to penetrate this channel because your sales team did not have the correct staffing, plan of attack, and training needed to break through? 

If you answered yes to either of these questions, this article is for you. 

If you manage an investment strategy, especially in a mutual fund, ETF or separate account, one of the most dynamic channels in the investment industry today is the RIA and Multi-Family Office Channel. 

Why is that? Because of the sheer size in assets and the size of the channel. Importantly, RIAs and MFOs are always looking for new, high quality investment ideas. Because there are over 1,200 RIAs that allocate capital to outside managers, there is an extreme opportunity to raise money in this channel. 

At Dakota, we know this to be true. Since 2006, our investment sales team has raised over $12B within the RIA and MFO channels. We’ve been selling in this channel for over fifteen years now, and have over 350 RIAs as clients, and we think it’s safe to say that we know the channel very well. 

However, RIAs are one of the most misunderstood channels within the industry. That is: most people don’t understand the unique dynamics that drive success in this channel. 

In this article, we’ll explain exactly how to penetrate RIAs, as well as how to hire, train, manage, and set expectations for an RIA salesperson. By the end of this article, you’ll be ready to start hiring and training your sales team to start penetrating this complex, but lucrative channel.  

First, we’ll dive into how to hire the right candidate for your firm.

Finding the right person to fill the role of RIA salesperson at your firm

First things first: You don’t necessarily need someone who is highly experienced in RIAs, you just need a candidate who is willing to be consistent in their approach to getting meetings with RIAs.

RIAs are one the harder channels to sell to because of the large numbers and the sophistication level. However, you need to set the expectation for your salesperson to focus solely covering all the RIAs in your total addressable market (TAM). As we will talk about later, the goal is to cover the channel in totality and build a pipeline.

In order to do this effectively and drive the results you need, we believe the RIA salesperson should be someone:

  • With a level of assertiveness
  • Who is politely aggressive
  • Who isn’t afraid to get a lot of “no’s” 
  • With a sense of persistence. 

Why? Because you need to be able to get a lot of meetings and you need to do that using email and a follow up phone call. 

At the end of the day, the person you need is someone who is professional and personable enough that if you were to put them in front of an RIA, they would be able to carry their weight. 

When you’re looking for this person, the most important thing is to be sure that once you find this person (we’ve found many of these people are former athletes, people who are used to competing), they are ready to hit the ground running. Once you provide your new salesperson with the industry and sales training necessary, they will have the spirit and be persistent enough to make real strides in the RIA space. 

How to train a new salesperson to attack RIAs effectively 

At Dakota, our sales training begins with The Dakota Way. You might be wondering what this is and how you can apply it to your business. We can help you do exactly that.

The Dakota Way is a sales methodology that has helped the Dakota sales team raise over $40 billion since 2006

It’s made up of three components: Know who to call on, Know what to say, and Have a killer follow-up system. Separately, these things may seem simple, but when combined, they can create a powerful sales process that will lead your team to success. 

Below, we'll explain each piece of The Dakota Way and how you can apply it.

1. Know Who to Call On

The primary focus of your sales effort should be to people who buy what you sell. Figuring out who this audience is and how to reach them is the first step to sales success. 

If you specialize in mutual funds, you need to call on allocators who deal in mutual funds: RIAs, ETFs, and separate accounts. Keep in mind that identifying the appropriate channels and contacts within each account can take a lot of time and legwork before you ask for a meeting. 

The key here is not to waste time convincing the wrong buyer that you might be a fit for them. In short: sell apples to apple-buyers, don’t try and tell an orange-buyer that they might like an apple instead.

2. Know What to Say

Unfortunately, this step is often overlooked, but it’s so critical. Simply getting a meeting with the right person is not enough. To win business, you need to master the art of the pitch. 

Institutional investors need to understand your story and how you got to your performance numbers. You’ll have to use carefully chosen words to bring your story to life while addressing the questions an institutional investor wants answered. Talking performance won’t be enough.

3. Have a Killer Follow-Up System

After getting to the meeting and nailing the pitch, it’s critical that you follow up. Almost everyone sends a thank-you email with some marketing materials. But that is table stakes. It’s the logging of those meetings into a CRM that is the critical step to get maximum leverage.

If your follow-up begins and ends with a single generic email, building a pipeline will be difficult. You need a follow-up system that helps trigger sales actions so you can effortlessly continue the conversation with the allocators you have met with in a meaningful way.

With this sales methodology in mind, Know Who to Call On (build a TAM); Know What to Say (be a master messenger); and Have a Killer Follow up System (log all your meetings for leverage), your sales team will be prepared to attack the RIA space.

How big is the RIA industry?

Part and parcel to the hiring process is the execution of a plan of attack. This is where the rubber meets the road in terms of having success with RIAs. 

We’ve identified over 1,200 RIAs that allocate to outside managers. For those of you who are not familiar with what that means, the SEC currently has roughly 14,500 Registered Investment Advisors (RIAs)

The large majority of those RIAs are money managers: investment firms that pick stocks, invest in private equity, invest in private credit, and pick portfolios of fixed income. They are not wealth managers, and they don’t allocate funds on behalf of clients. 

What this means is that you and your team would need to go through those 14,500 firms and identify the RIAs who do allocate to outside managers. The good news? We’ve done that for you within Dakota Marketplace. 

Once you know who the 1,200 RIAs are, you simply need to start reaching out to set up meetings. More detail below on how to do just that.

How to break into selling to RIAs 

Once you hire a salesperson, there needs to be a clear business plan. What is your sales plan? How are you going to attack these 1,200 RIAs? Well, in our experience there are two key ways to do this.

1. Attack them from the top down.

If you have a twelve month plan, then you’ll want to look at the next year, and say to yourself, okay, “How can I go from the top down?” You will want to introduce your strategy to the largest firms first, and get your firm and strategy in front of them.

2. Attack the RIAs city by city. 

Anyone who has raised money knows that when you travel to a city, you’ll try and pack as many meetings into that trip as possible. At Dakota, we call this city scheduling. This is built around metro areas. Start with NYC, Boston, Philadelphia, Washington, D.C., Chicago, San Francisco, L.A, Atlanta, and Dallas. 

Following this outline you can go into Marketplace, find the RIAs in each of these cities, and send an email to each firm in each city introducing your firm and your strategy. Then your sales team can put this into action by creating reports in your database outlining their progress.

How to turn RIAs from prospects into allocations using reports

At Dakota, we do this by starting at the account level. Take BBR in New York City, a $6 billion RIA. We create a custom field in our Salesforce database called “Sales Cycle.” Everyone starts out in the “prospecting” category, then as we qualify them it moves to “qualified,” then to “evaluating,” and then to the deep sales cycles. Why this is so critical is because you need to be able to look at lists of RIAs and know exactly where you stand. Applying a custom sales cycle to the Account screen makes this very easy. 

As you look at your account list over time, you’ll start to see that not everyone is “prospecting” anymore, they are in different sales cycles. From there, you’ll start to create an opportunity pipeline report. This means that you’ll go in and create an opportunity, and evaluate that opportunity, looking through the list from top to bottom and running the report based on sales cycle

Over time you will be able to look at the list of 1,200 RIAs and you will be able to quickly see how the sales cycles are changing from “prospecting” to the others. If you’re thirty, sixty, or ninety days into your sales cycle, you of course do not want the majority of your opportunities to be “prospecting.” As time moves on, you want to see fewer and fewer prospects, and more and more in evaluating, red zone, and more final presentations. 

Measuring the success of your sales team

The reports we mentioned above are how you measure the success of your sales team. 

You as a sales leader want to see that prospecting number moving closer and closer to zero every day, as this means your sales team is out there doing just that: qualifying, setting up meetings, and selling. 

Eventually, you also want to zero out the “qualified” category. Maybe those RIAs don’t invest in your asset class, or they do invest in your asset class, but they already have an investment there that they’re happy with. These can be moved into the “long-term evaluation” status category, or into a specialized category noting that while they do invest in your asset class, they already have that investment they’re happy with.

How to define what a “good” salesperson looks like at your firm

As the sales leader or president of the company, it’s your job to set the standards for what a “good” salesperson looks like at your firm, but it’s equally important that your sales team knows and understands what “good” looks like. 

“Good” is not 1,200 prospects. “Good'' is not 1,200 firms marked as “qualified.” 

“Good” means sending introductory emails, setting meetings, getting your firm and strategy in front of the right people within those prospects, and getting feedback to move those prospects into an active sales cycle. 

Bottom line: “good” is being in an active sales cycle across the 1,200 or so RIAs.

Once you start reviewing these reports as a team on a weekly basis, you will have a clear idea what each salesperson is doing, and what you’re judging them on is not so much how much business they are closing, but on covering their accounts and getting those accounts into sales cycles. This is the most important thing you can be tracking. 

Over time, the goal is to zero out all of those prospects, and to know where you stand with all of your RIA prospects. The opportunity pipeline reports will reveal all the work that comes from attacking those prospect lists.

How to start setting meetings with the right people

Now that you know who to hire, how to train them, and how to attack RIAs, it’s time to start setting meetings with qualified buyers. 

How do you start doing that? With an email. 

When you’re managing and leading this sales team member, they have to be setting meetings with allocators. Every allocation starts with an initial meeting. Nothing can happen without that. 

So, in order to get these meetings, you have to send that first email. The subject line of these emails should contain the person’s name, and a direct call to action, outlining the date and time you want to meet. This lets the know exactly what to expect within the email. 

For more details on how to write an email that packs a punch, you can read our 5 tips on getting your emails opened and responded to.

Get started raising money with RIAs

We’ve thrown a lot at you all at once, but now it’s time to hit the ground running. 

You’ll want to be sure they are up and running using The Dakota Way sales methodology. Then, start creating your plan of attack, whether you choose to do this by firm size or by city, so that you can start running reports on them. Over time, you’ll start to see your number of prospects decrease, and your “evaluations,” “red zone” and “final presentations” categories growing. This is how you will know your team is beginning to see the traction you want within RIAs.