Small Does Not Mean Alone
Most advisors who built a firm got there by being very good at one thing: taking care of clients. The trouble is that somewhere along the way, the business wrapped around those clients quietly gets heavier. And the things that got a firm off the ground are not always the things that let it keep growing.
That’s not a knock on independence. It’s a recognition that running a modern RIA is a different job than it was ten years ago, and that for firms on the smaller end of the RIA segment, there’s a model worth a serious look: the RIA tuck-in.
The industry has taken a stand
Fidelity has recently told RIAs with less than $100 million in client assets on its platform that they have until June 30, 2027 to find another custodian. The notices went out in early October, and a Fidelity spokesperson called applying its existing $100 million minimum to current clients a “consistency measure.” Press estimates of how many firms are affected range from a few hundred to more than 1,000. Will Schwab and possibly others follow suit?
We can’t predict what any custodian does next, but if the minimum is $100M now, when will it be $150M or even $200M? But the lesson doesn’t depend on it. A small firm’s custodian relationship is something it rents on terms set by someone else’s economics, and commission-free trading has squeezed those economics for everyone. A forced move means re-papering accounts, reconnecting systems, and explaining it all to clients, on someone else’s deadline.
A tuck-in turns that into the platform’s problem. Larger firms generally have more leverage with custodians, and more resources to handle a transition if one is ever needed. The best time to explore that is before a deadline sets the terms.
The numbers don’t lie
Every RIA, regardless of size, carries a base layer of cost. Portfolio management and planning software, a CRM, cybersecurity, compliance, insurance, audits, reporting tools, and the operations staff to keep it all running.
Here’s a simple illustration. A firm with $150 million in AUM at a 1% fee generates about $1.5 million in revenue. A meaningful slice of that goes to the infrastructure above before the owner or the team sees a dollar. Now picture a firm ten times that size. Its revenue is ten times larger, but its compliance program, its tech stack and its cybersecurity requirements are not ten times more expensive. They’re nearly the same.
That gap is what scale buys, and it’s the hardest thing for smaller firms to create on their own.
You’re not running one business. You’re running five.
The founder of that $150 million firm is typically the lead advisor, the chief operating officer, the chief compliance officer, the head of technology, and the HR department. Often on the same day.
Nobody starts a firm because they love vendor management. Yet it’s common to hear owners say a third or more of their week goes to things that don’t involve a client. Every hour spent on a custodian transition or a compliance questionnaire is an hour not spent on a client meeting or a referral conversation.
A better structure: The RIA Tuck-In
A tuck-in does not have to be a sale, or a loss of identity. In a well-structured tuck-in, you keep serving your clients, keep your company branding, you remain the advisor, and your team stays with you. What changes is what sits behind you: compliance, operations, technology, investment infrastructure, all provided by a larger platform.
Think of it less as giving up the firm and more as handing off the parts of the firm you never wanted to run.
Succession is the quiet driver
Many firms in this size range depend on one or two people. That works until it doesn’t. Clients age, founders think about the next chapter, and the options for a founder-dependent firm get narrower the longer the decision is put off.
A well-orchestrated tuck-in can turn succession from a deadline into a runway. You can identify a partner while you’re still healthy and engaged, transition relationships gradually, create liquidity on your own timeline, and give clients and staff continuity instead of uncertainty.
What clients see
Done right, clients notice an upgrade, not a disruption. The same trusted advisor, now backed by a deeper bench, more operational and support resources, stronger cybersecurity and better reporting. Capabilities that are expensive to build and support alone become part of the service.
Final thoughts
For smaller RIAs, an RIA tuck-in isn’t about giving up what you built. It’s about protecting it. Independence and scale are not opposites, and the right partnership can give you back many hours of your time, strengthen your team, solve for succession and preserve the client relationships that made the firm worth building in the first place.
If you’ve been wondering whether this is the right moment to explore it, a conversation costs nothing. We’re happy to have it.
