u/cameron9980

I posted about the growth of my solo RIA last quarter and it got a lot of traction.. so I figured I'd update with the new numbers.

For some background for those who haven't seen my previous post. I run a solo, fee-only, independent RIA. I am focused on investment management and financial planning for people near and in retirement in my local low/med cost of living area - basic stuff. Most clients here are $500k-$1.5m, nothing special although I do have a few whales for the area. I don't consider myself a good salesman or asset gatherer. This is to show those out there that are more planning focused and analytical that you can have a good practice for yourself even with slow/average growth (although this quarter was a bit above average for me).

Here are some highlights from Q2 (and more detail below):

- Total quarterly revenues grew from $136,500 to $152,500. Largest ever nominal jump Q/Q.

- 37% YoY growth - highest ever from a high base

- Average fee was around 0.75%. Lower than most due to a few HNW clients and flat fee clients mixed in there. This is not a metric that matters much to me: revenue, margin, and retention are much more important

- Margin remained around 85%. The way I calculate margin for this is also not perfect and I might improve in the future. Right now I'm looking at what I pay myself through distributions and salary throughout the quarter and dividing that by revenue, which isn't accurate. I leave a bit in the bank and I'm paying myself based on what I made last quarter, not what I will make this quarter.

I attribute the growth this quarter to a few things: internal growth of my largest clients (big one time and recurring deposits near the beginning of the quarter), and 'catch up' from mid/end of last quarter. Meaning I got a few big clients at the middle/end of last quarter and the fees were lower because they were only billed for half of the quarter previously. This catch up affect is constantly making the average fee look lower than it truly is because I'm looking at AUM at end of quarter vs revenue earned at end of quarter.

Some more background:

A few years ago I purchased a small book of business from a retiring solo practitioner (before this chart starts), other than that I have just focused on building my book of business in a small town USA and I have gotten a few good clients from social media as well. I don't consider myself a great salesman, I am not bringing on $20m+ net new AUM every year or anything like that. Last year was about $7-8m and this year is shaping up to be roughly the same. Years before that it was $4-5m. Zero paid advertising and keep costs low within my practice. Check my post from last quarter for answers to common questions like tech stack, etc.