In the independent wealth management industry, the mid-sized RIA has long been considered the “sweet spot.” These firms have historically been large enough to access resources and talent beyond the boutique shops, while still being nimble and personal compared to the national enterprises and aggregators. But that position continues to narrow every year. What was once a competitive advantage is increasingly turning into a pressure point.
The truth is middle-market RIAs are getting squeezed like being in the middle seat of an economy airline carrier and caught between two models that are pulling further apart.
On one side, smaller, boutique RIAs win by leaning into intimacy and flexibility. They’re able to tailor their service model to the individual client, creating a sense of exclusivity and personal connection that’s arduous to replicate at scale. Their size is not a weakness; it’s been their story, and many clients are buying it.
On the other side, the largest RIAs have gone full enterprise. They’re operating with scale advantages that touch every corner of the business (and the country): lower custodial and manager pricing, exclusive access to institutional investments and the ability to plow significant dollars into brand marketing and technology. Their recruiting machines are relentless, and their value proposition to advisors often comes down to one word: resources.
That leaves the mid-tier RIA somewhere in the middle: not small enough to win on intimacy and not large enough to match enterprise scale. And with margins thinning across the industry, “the middle” is not a comfortable place to sit.
With margins thinning across the industry, “the middle” is not a comfortable place to sit.
The Margin Squeeze
Costs are rising everywhere you look. Compliance has become more resource-intensive, which requires more than a technology platform as a standalone solution to provide oversight. Technology, once a nice-to-have differentiator, has become the baseline expectation of clients. Tech-savvy clients notice when their digital experience feels dated compared to what they get from their bank (yes, banks have stepped up their game, too), crypto apps or even their favorite retailer. Falling behind isn’t just inconvenient; it risks losing trust.
At the same time, while inorganic growth is rampant across the industry, organic growth has slowed. Client acquisition has shifted toward firms with broad brand presence, enterprise marketing and M&A pipelines. Smaller firms still grow on referrals and reputation, but mid-sized firms are stuck in between: too large to rely solely on word-of-mouth and too small to fund institutional-level campaigns.
That gap widens when it comes to talent. Retaining top advisors and next-generation leaders requires compensation, career pathing and culture, all of which demand investment. Enterprises can spread those costs over a much larger base. Mid-sized firms end up trying to match the offers without the same scale of revenue to support it.
Strategic Options
None of this means mid-sized RIAs are doomed, but it requires some ingenuity. It does mean survival will hinge on making sharper, more intentional strategic choices. The firms that will thrive are leaning into three key areas:
Specialization. Owning a niche is one of the most powerful ways to defend against both ends of the spectrum. A firm that becomes indispensable to a defined client segment is no longer competing on generic “wealth management”; it’s solving unique problems for a community that values expertise over scale. Whether that’s corporate executives in a certain industry, business owners facing succession or multi-generational planning, specialization builds loyalty that isn’t easily disrupted. I hear the underserved neurodivergent community is looking for a hero.
Partnerships. Independence doesn’t have to mean isolation. Increasingly, mid-sized firms are turning to partnerships to level the playing field. That can mean leveraging enterprise pricing through custodial networks, plugging into fintech platforms that deliver institutional-quality tech at a fraction of the cost or outsourcing functions that don’t need to be kept in-house. Partnerships can free up leadership to focus on client strategy and growth, rather than being dragged down by operational complexity.
Increasingly, mid-sized firms are turning to partnerships to level the playing field.
Capital. Growth takes fuel. Firms trying to scale on 89 octane eventually stall; the ones that thrive make the shift to premium. Usually that means exploring equity solutions or lending – whether through minority investors, strategic partnerships, selective M&A or an SBA loan. The right capital partner can unlock access to talent, technology and marketing that would otherwise remain out of reach. The key is to pursue capital on your terms, not out of desperation. Done well, it creates a growth flywheel; done poorly, it can compromise independence and culture.
The Fork In The Road
Over the last 15 years, I’ve had the privilege of working with some of the largest entrepreneurial advisors in the country. One lesson stands out: Firms that wait for competitive pressures to ease rarely make it through intact. The industry doesn’t go backwards, ever. Client expectations won’t get lower. Technology won’t get cheaper. And competition isn’t getting any less aggressive.
The real fork in the road for mid-sized RIAs comes down to posture. Are you waiting for the squeeze to let up or are you leaning into the hard choices that create a defensible future? Some firms will try to be all things to all people and spread themselves too thin. Others will double down on specialization, form smart partnerships and use capital to build leverage. Those are the firms that will still be standing and thriving 10 years from now.
Are you waiting for the squeeze to let up or are you leaning into the hard choices that create a defensible future?
The squeeze is real. But it’s also clarifying. It forces mid-sized RIAs to define who they serve, what makes them different and how they’ll compete in a marketplace that rewards both intimacy and scale. For those willing to make the choices, the middle ground doesn’t have to be a no-man’s land. It can be the crucible where the next generation of leaders in wealth management is forged.
Ryan Marcus is Chief Business & Engagement Officer at Binah Capital.
