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5 Steps to Prepare Your Firm for a Potential Recession

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As the market experiences increased volatility and investors become uneasy, it is crucial for firms to reassure their clients and ensure the stability of their own business. In this article, we will provide five actionable steps to update your firm’s approach, improve client satisfaction, and enhance your firm’s value proposition during uncertain economic times.

1. Transition to Non-AUM Fees

Consider adopting non-AUM (Assets Under Management) based fee models, such as flat fees, subscription fees, or hourly fees. By moving away from a reliance on market performance, you can generate consistent and predictable revenue. Many clients are familiar with this billing structure from other professional services they receive, making the transition more seamless.

2. Proactive Client Communication

Recognize that each recession affects clients differently, and their concerns and fears may vary based on their individual circumstances. To alleviate their worries and reduce the risk of complaints, proactively reach out to clients. You can strengthen the client-advisor relationship by addressing their concerns promptly and demonstrating your commitment to their financial well-being.

3. Develop Additional Support Services

During a recession, clients may face job losses, depleted savings, and potential liquidation of their investment accounts. You can support your clients through challenging times by offering services such as financial planning, budgeting assistance, and guidance on alternative funding sources. Providing resources for scholarships, business funding, or assistance programs can further enhance their confidence in your firm’s commitment to their financial success.

4. Establish Professional Partnerships

Build a network of professionals, including counselors, tax attorneys, and childcare providers, who can complement your services and help meet your client’s evolving needs during a recession. By referring clients to trusted experts within your network, you demonstrate a comprehensive approach to their financial well-being and provide additional value beyond traditional investment advice.

5. Foster Client Engagement through Group Meetings

Organize monthly events where you bring together your clients in a group setting. Utilize these gatherings to discuss market updates and portfolio management strategies and introduce additional resources. Creating a sense of community and shared experiences will make clients feel less isolated and more supported during challenging economic times. Additionally, these events provide an opportunity for a Q&A session, allowing you to address individual concerns while reinforcing the value of your services.

In times of economic uncertainty, it is crucial for RIAs to adapt their strategies to meet clients’ evolving needs. By implementing these five steps, you can enhance client satisfaction, strengthen relationships, and position your firm as a trusted partner during a potential recession. Remember, every decision to engage your services is emotional; consistently adding value and prioritizing client support can instill confidence and maintain long-lasting client relationships.



Contact My RIA Lawyer Today: Good Compliance is Good Business®

If you are adding more services and more payment options, you will need to make updates to your Form ADV, Compliance policies and procedures, and client contracts. As a full-service financial services law firm, we can help! At My RIA Lawyer, our regulatory compliance and legal nerds help financial advisors and firms navigate the legal complexities of the RIA world. We work virtually and long-distance with clients from coast to coast. To schedule a consultation with our RIA compliance nerds today.


The information in this blog post (post) is provided for general informational purposes only and may not reflect the current law in your jurisdiction. No information in this post should be construed as legal advice from the individual author or the law firm. It is not intended to substitute for legal counsel on any subject matter. No reader of this post should act or refrain from acting based on any information included in or accessible through this post without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from a lawyer licensed in the recipient’s state, country or other appropriate licensing jurisdiction.

Author Bio

Leila Shaver is the Founder of My RIA Lawyer, a law firm that provides compliance and legal consulting for financial institutions. With extensive experience as a securities attorney and compliance expert, she has served as Chief Compliance Officer and General Counsel to RIAs, BDs, and TAMPs with billions in assets under management.

Leila understands the challenges RIAs face and is committed to helping RIAs streamline their processes, mitigate risks, and ensure compliance with regulatory requirements. She received her Juris Doctor from Atlanta’s John Marshall Law School and is a West Georgia Young Lawyers’ Association member. Leila has received numerous accolades for her work, including the Carroll County Bar Association’s Outstanding Young Lawyer Award in 2017.

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