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The RIA Playbook for 2026 (w/ Pete McGratty)
29 Plays3 months ago
The RIA industry has already witnessed a rapid acceleration of change and in 2026, a firm’s success may hinge upon anticipating the challenges ahead.
Pete McGratty is Executive Director of RIA Development at Verdence Capital Advisors / RIA+ and he joins the podcast to discuss:
- His Big Three Predictions for RIAs in 2026: Why Pete is forecasting an industry embrace of AI tools and private investments, and why he believes we may see the consequences of consolidation.
- Why Personal Relationships Remain King: Technology solutions may help with efficiency and scale, but Pete cautions to not forget that this business revolves around building strong, personal relationships.
- Protecting The Fiduciary Standard in the Independent Channel: How Verdence sees the old wirehouse tendencies emerging amongst PE-backed RIAs.
Copyright 2026. TradePMR, Inc. For a transcript of this episode with sources, visit synergizepodcast.com. Verdence Capital Advisors / RIA+ and TradePMR are unaffiliated companies. If you want to join the conversation or connect with us, please visit us at synergizepodcast.com. This content is provided for general information purposes only.The views expressed by non-affiliated guest speakers are their own and do not necessarily reflect the opinion of TradePMR Inc. or its affiliates. TradePMR Inc. and its affiliates do not endorse any guest speakers or their companies and therefore give no assurances as to the quality of their products and services. This channel is not monitored by TradePMR Inc. TradePMR Inc. does not provide investment advice, tax advice or legal advice. TradePMR Inc. is a member of FINRA and SIPC. TradePMR, Inc.,is registered with the Securities and Exchange Commission {SEC) and the Municipal Securities Rulemaking Board (MSRB). TradePMR provides brokerage and account services to registered investment advisors. Custodial services provided by First Clearing. Clearing is a trade name used by Wells Fargo Clearing Services, LLC, Member SIPC, a registered broker dealer and non-bank affiliate of Wells Fargo & Company.
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Transcript
Podcast Introduction
00:00:02
Speaker
Welcome to Synergize, unscripted conversations where we explore the evolving role of the financial advisor in an emerging AI driven world. Join us as we bring together thought leaders across a range of disciplines and industry experts, sharing insights designed to help RIAs thrive in the industry of tomorrow.
00:00:27
Speaker
Welcome back to
Hosts Introduction
00:00:28
Speaker
Synergize. I'm Bill Capel, Director of Client Growth at Trade PMR, a Robinhood company. And I'm Ryan Neal, editorial manager at Trade PMR Robinhood. And Bill, we are in 2026. It is the new year. 2025 was a ah pretty huge year for yourself, for myself, for Trade PMR and Robinhood.
00:00:49
Speaker
But it's behind us now. We're looking ahead.
2026 Financial Industry Changes
00:00:51
Speaker
Today, we're talking about what's coming forward, what this new year has in line with us, because ah i have a feeling it's not gonna be any slower than last year was. What do you think? I agree 100%, Ryan. In fact, I've been around for a while,
00:01:03
Speaker
And you know this industry has always been subject to changes, regardless of what's going on in the world. I think what's key here going into 2026 is the acceleration of change, how quickly things are happening.
00:01:15
Speaker
And I think the challenges that face us are interesting because they're they're different. And while change is a constant within our industry, I think right now we're we're managing this thing at warp speed.
00:01:28
Speaker
That's right. So our guest today is here to talk to us all about looking forward.
Guest Introduction: Pete McGreddy
00:01:32
Speaker
Today's episode is all about what what we what we see coming down the pike and how advisors can prepare for it. So our guest is Pete McGreddy. He is the executive director of RAA development at Verdance slash RAA plus. going to have him talk a little bit about that. And he's going to share his unique perspective on the industry. he didn't just start as an RIA, long career in institutional finance and investing, and he has ah a unique perspective to bring this to this conversation. So, Pete, welcome to the podcast.
00:02:01
Speaker
Thanks so much. I really appreciate you guys inviting me. I've been working with Trade PMR for over 15 years now, and you guys have been a fantastic group of people to work with, and I'd love to to watch your development and your growth and your increasing role in this industry.
00:02:17
Speaker
We love to hear that. ah Pete, do you want to start maybe just telling our audience a bit about who you are
Overview of Verdance Capital Advisors
00:02:23
Speaker
and your firm? And i know we have in our notes here, it's Verdance slash RA+. I want to talk a little bit about what that is before we dive into our conversation.
00:02:31
Speaker
Yeah, so real briefly, Verdance Capital Advisors is an independent wealth management firm located in Hunt Valley, Maryland. We have offices up and down the East Coast, Alexandria, Virginia, Naples, Florida, Sarasota, Florida, up in Boston.
00:02:47
Speaker
So our genesis is really the mid-Atlantic, but frankly, we now have clients in 40 of the 50 states, and we now manage for those clients about $4.6 billion.
00:02:58
Speaker
The firm really operates in four groups. There's the traditional wealth management business that works with high net worth individuals doing planning and investments. We have another group that works with professional athletes and entertainers.
00:03:11
Speaker
We have a third group that works with the ultra high net worth individuals and families. It's a family office business. And the fourth group is Verdance RIA Plus, which is the group that I'm leading here at Verdance.
00:03:24
Speaker
And that's really an acknowledgement that the that the the business model that we created and all the resources that we invested in have proven themselves to work in supporting our own staff advisors and allowing our firm to grow from roughly a billion and a half six years ago to $4.6 billion today. And we saw an opportunity to share what we've learned and share the resources that we've invested in and built and put together with other independent wealth managers around the country.
00:03:59
Speaker
That's fantastic. That transition is an interesting transition. And I'm sure that a lot of what you experienced prior to joining the RIA space has been helpful. And you know with that kind of lens, Pete, let's have a conversation around What you see coming down the pike for the industry in 2026, as I mentioned in in the introduction, things are happening pretty
Challenges in Wealth Management
00:04:23
Speaker
quickly. ai is having a major impact. we're We're looking at issues around succession planning in the face of a huge wealth transfer on the horizon, next-gen advisors, technology, et cetera.
00:04:37
Speaker
Share with us from your perspective, How you think things like the client experience is going to really be impacted by what's coming? When I started in the business 15 years ago, the big trend was the movement of of advisors from the FINRA broker-dealer world into the independent channel where they're regulated by FINRA. And as you know, the the driving force behind that was there were some conflicts of interest that you're going to
00:05:09
Speaker
you're going to identify that the the wealth managers were experiencing on the FINRA world. And they were doing some things that were not always in the best interest of clients. And then of course there was bureaucracies and other things that impacted the advisors directly. And eventually they threw up their hands and said, i want
Four Pillars of an RIA Firm
00:05:28
Speaker
to be independent in the independent channel, both because we think it's the fiduciary standard is a better standard for our clients.
00:05:35
Speaker
Uh, and secondly, because I want the freedom to take care of my clients the way i see fit. So that's really been under waste for the last 15 years that I've been involved with the wealth management industry.
00:05:47
Speaker
Uh, the second thing that has been going on during that period is on a long, long standing believer that there's sort of four legs to the stool of an RIA firm. Uh, the first in terms of the value that they provide.
00:06:01
Speaker
So leg number one is really the fiduciary standard. We're going to do things that are in the best interest of the client. We're only going to get paid by the client and we're going to avoid having any conflicts in servicing that client.
00:06:15
Speaker
the second The second leg of the stool is we're going to have, we're going to limit the number of clients that we work with so that we can have a proactive relationship and really know who our clients are and provide them the best service possible because we know them.
00:06:31
Speaker
The third leg of the stool is doing robust financial planning, not just as a as a loss leader, as a small, you know, a single plan done up front in order to help win the business, but ultimately a robust plan that is being executed over time, over the life cycle of the client addressing their needs at any given time in their in their life.
00:06:56
Speaker
And then the fourth is obviously providing best in class investment management. I think the growing concern and the the growing realization among a lot of those advisors is now that now there's a new game in town that's these PE backed consolidators and they look and feel the same as these traditional firms to the client.
00:07:22
Speaker
But in fact, they may have very different goals and very different values when you look at those four legs in the stool. So for example, In terms of the fiduciary standards, some of these firms are getting very large.
00:07:37
Speaker
They're starting to expand the scope of the products that they offer. And in doing that, sometimes they're now ah starting to recreate the old wire house, except they're doing it in the independent channel in that they may be selling products in addition to just providing a service for
Tech's Impact on Advisor-Client Relationships
00:07:56
Speaker
fees.
00:07:56
Speaker
It's almost like the wheels coming full circle. Exactly. In the industry, the wire house world, the move independence, and now the scale is bringing us all the way back around to through the looking glass, as it were.
00:08:07
Speaker
Yes, and that is that's the point that I'm getting to, and and we'll tell you some of the implications of that. If you look at the second leg of the stool, you're starting to see some of these large firms. I not i don't want to speak, of I don't want to characterize everybody is doing this, but there are certain Certainly a number of firms that are doing this where they're starting to stack instead of 100 to 150 clients per advisor, you're starting to see 300 plus advisors to a client. That shifts you from a realm of, i know who my client is, I know them by name, I know their situation to to a reactionary environment where I'm dealing with them when I get a phone call.
00:08:48
Speaker
Very different part of the a model from a value standpoint. So let me yeah let me jump in with a quick question on that, because that's a very, very interesting point. you are How does technology play into that? First first question is why do you think they're doing it?
00:09:03
Speaker
And is it scale that's giving that advisor the ability? Because I've heard this before, where as an advisor, you know with the technology that's available, in theory, I could i could handle more relationships. to Talk a little bit about that.
00:09:18
Speaker
Historically, if you've looked at the brokerage business, if you've looked at the asset management business, if you've looked at the wealth management business, the primary ah the primary driver of that business has always been the personal relationship with the customer or the or the personal value of the broker or the money manager or the wealth manager. I don't think that will ever change. It's that trusted relationship that that drives that business.
00:09:48
Speaker
And technology ultimately is a productivity tool to help the advisor be more efficient in servicing that client, but it is never going to trump that relationship. And so I think it becomes, you may have the best technology tools on the planet to serve your clients, but at the end of the day,
00:10:09
Speaker
the human mind only has the capacity to proactively manage a limited number of personal relationships. And once you move beyond that, it becomes a less a much less robust relationship. So that's really interesting, kind of a different spin on this, because we hear so much from the technology firms about the increased efficiencies and scale. And for firms that want to grow, that technology and all the efficiencies that it brings will ultimately let them serve more clients. And you seem to be taking maybe a different approach to this. so
00:10:41
Speaker
But I would love to ask you, um So then what, where do you think the efficiencies from technology allow you to do? If if you want to keep your client to advisor ratio around that a hundred to 150, what efficiencies are new technologies driving and how are they helping? How are your advisors using that to improve their practice if they're keeping a sort of cap on their client level?
AI's Role in Wealth Management
00:11:04
Speaker
Well, so this is, I'm not going to pretend to be a technology expert, but based on the conversations I'm having with advisors, I think there's a lot of excitement around ai right now.
00:11:16
Speaker
I would split the AI opportunity into two groups personally, based on my conversations. First is, you know, more simple things that help folks manage their day. It's it's it's not ah not that much different than us having the Zoom conversation, which we couldn't have a long time ago, that solves remoteness. And now you're starting to have transcription services that can capture all this and immediately put it into your CRM.
00:11:46
Speaker
And now you're starting to have some basic AI that can pull the summary information out of those transcriptions and and make notes of that in the CRM. And so all of a sudden, now you can look back in a very efficient way and understand what we covered in the last cover last client conversation. and we can And we also have a to-do list on what we need to do before our next conversation.
00:12:11
Speaker
So those those are typically the expediencies that we've seen with a lot of different technology evolutions over time. I think the more fundamental AI solution is still in the making.
00:12:24
Speaker
ah And it's a much bigger it's a much bigger task for the advisor to accomplish. What do I mean by that? Ultimately for AI to be successful, it means you have to have your data ah aggregated in ah in a common sandbox and organized and vetted to make sure it's all good data.
00:12:46
Speaker
And only then is AI ever going to be able to fully realize its realize its value. Of course, that has the problem that most wealth management firms tend to have trouble with, and that is investing ahead of revenues. That's going to be a big investment lift. It's going to be a big effort lift. And it's going to be a longer term strategic project that has to take place before you can really start to realize the AI. yeah And that's a firm that's something, for example, Verdance.
00:13:17
Speaker
We've been undertaking that for the last two years and finished that project. That took a lot of effort and a lot of expense. And now we're starting to explore how to apply AI to that data set.
00:13:30
Speaker
I'll let Bill take the next question here, but I just want to share a line that I that i read recently that was, um ah AI won't replace advisors, but AI could end up replacing advisors who don't learn how to use AI. Yep.
00:13:43
Speaker
out this sort of you know you like kind of like figure out this technology figure out you could use it in your practice uh or be left behind and and you know my personal favorite use of the technology easily hands down is the one you said transcription from my reporter days uh when I would record interviews uh or I'd be out in the field and I wouldn't have a notepad so i would just take notes uh audio then I would have to sit down and manually transcribe that myself and my My God, it was the worst. It was the worst part about the job, hands down. So I had this technology back then, would have saved me hours and hours and hours. But but anyway, I'm getting on the side. check out Bill, i'll I'll let you take the next question.
00:14:23
Speaker
Yeah, thanks, Ryan. You know, I wanted to, ah I thought, make a quick comment. I thought your your observations, Pete, around this notion of what the human being can absorb,
00:14:37
Speaker
can absorb in terms of relationships is very important. And I want to underscore that. that's that's That is information that's been around for a long time and it's been well researched.
00:14:49
Speaker
And I think that it's an important point to make here, which if the game is get more people, you know, that hits squarely on this whole notion of the client experience there. If the client really wants a relationship hard to do,
00:15:04
Speaker
with three or 350 people to your point. I wanna go a little further on client relationships because I think they're extraordinarily important. You've already raised this as being a fundamental differentiator between firms for one.
00:15:19
Speaker
And when you think about this in the context of scale, what you're thinking around creating scale while at the same time preserving that personal relationship.
00:15:34
Speaker
So i the way I view scale, and I think it's changing a little bit, let's look back 15 years ago when I first got into the business. I got into the business to help build an outsourcing solution to support other independent wealth managers.
00:15:53
Speaker
The core of that offering was basically solo practitioners and small ensembles do not have scale, and so they're spending their time, too much time in the busy work associated with running the business, as opposed to sitting in front of clients and prospects.
00:16:11
Speaker
So outsourcing was basically a way that they could achieve scale without having to do the busy work of doing the investment and all the effort of executing on that investment themselves in house. So that's where it was 10 years ago. I think it is actually changed and requires even more scale today. So fast forward to today,
00:16:33
Speaker
That's part one of what outsourcing's value is to firm. um The second piece is now they're competing against larger firms that have a broader offering and have ah and oftentimes have a more sophisticated offering.
00:16:51
Speaker
And so now the outsourcing is not only about freeing up their time, but arming some of these firms with the breadth and depth of offerings that will allow them to be competitive. Because the reality is today, there's lots of surveys that support this, that clients are now talking to, you know, two or three or four advisors before making a decision to choose one.
00:17:16
Speaker
And 15 years ago, those five, let's say, let's take an example with two advisors. Those two advisors looked very similar. They were the same size. they They also might've been a solo practitioner or a small ensemble.
00:17:30
Speaker
Fast forward to today, you may have that same solo practitioner small ensemble. They look like a small organization. They may be operating out of a small set of offices.
00:17:41
Speaker
They still do the planning and they're still offering one strategy, probably a passive strategy with multiple risk models from conservative to aggressive. Then they go to door number two.
00:17:52
Speaker
And now they meet a larger firm and that larger firm has large offices and they're very nice. And the client walks in and feels like, oh, I've made it. It's a sort of an aspirational thing.
Balancing Scale and Personal Service
00:18:02
Speaker
Scale, not only is scale about, you know, make, creating a more efficient business and freeing up your time to focus on the client, but it's also when you're in front of clients, having the, the, the, the tools in your tool belt to compete and look like you're, you're competitive against some of these larger firms.
00:18:21
Speaker
That makes sense. You know, as you know, this has been this is you know, this is a ah great conversation. what I want to do is shift just a bit, Pete. And and as we think about launching into 2026, you know, using what you've already stated as sort of the context and background, what are the three things you're really focused on in 2026 to continue to grow your business?
00:18:49
Speaker
ah Well, let me speak. Let me speak specifically to the folks that we're trying to help because I think we figured out our model and it's working successfully. Now we want to share our model with other independent firms. And this is this comes back to where we started the conversation that there's this division now between the large firms and the small firms. And so we just sort of walked through some of the advantages of scale that a large firm has when they're competing with a smaller firm. The second piece of the the second thing that's different between the large firms and the small firms is what their values or their goals are.
00:19:27
Speaker
So increasingly, the large firms are viewed as because they're PE backed, they're much more professional ah professional investors that are looking for return. And so the shift of focus often moves from putting the client first and providing the service to that client first some of those resources get shifted to sales and marketing because the firm needs to add addd clients and add AUM so that they can improve their valuation for the next sale to another PE firm or to go independent or or to go public. And we've seen that happen.
00:20:08
Speaker
i won't give I won't use names, but we've seen some large firms go public and the advisors became very unhappy because the resources shifted from supporting clients and advisors to sales and marketing. And they just didn't feel the love anymore. i have a long list of examples of that, that that you can go through.
00:20:29
Speaker
By contrast, the smaller firms want to stay focused on the clients and they want to stay focused on providing them good solutions, but they're lacking the scale that they need to be competitive with the larger ones. So, I think what's happening and and i and it's what it's become very, very clear over the last year, if you attend the conference cycle, that the this is this is this realization is starting to come clear is to the point, Ryan, that you made earlier, we've kind of recreated some of what we left when we moved from the FINRA broker dealer world to the independent world. Some of that's being recreated and not for the good.
00:21:11
Speaker
And the difficulty for the more traditional firms that want to stay in the stay focused on clients and service is to the client. Very often the value proposition looks similar.
00:21:26
Speaker
So the point is, is that I think you're seeing in the world divide in the two. and what's going to happen is the smaller firms who want to stay, stay true to their values are going to have to start figuring out how to work together.
Strategies for Smaller Firms
00:21:40
Speaker
either through joining joining together and building a firm committed to those values and building the scale that way, or finding a way to capture those those resources in that scale through outsourcing.
00:21:53
Speaker
Great. Well, Pete, thank you very much for joining us. I'm going to move to wrap up our conversation, but I'm going to throw one more at you. whats What's a prediction? Let's brief one here, sort of lightning round. What's a prediction you have for what we're going to see in 2026 and how advisors can prepare for that?
00:22:12
Speaker
Well, I'd say along the lines of what we were discussing, I think we are already seeing advisors starting to look for new ways to work together to solve this solve this issue.
00:22:23
Speaker
I'm seeing it in succession conversations where where advisors want to make sure that their clients and their employees land at at firms with similar values rather than taking the big check from the large firms.
00:22:36
Speaker
um I think that you're going going to get going the second thing I think you'll see in 2026 is I think we're on a three-year path to much wider adoption of private
Private Investments by 2026
00:22:47
Speaker
investments. I think the last year or so has been about recognizing that I need to offer this and starting to get educated on what private investments are and who are the people who I can partner with to be able to offer that.
00:23:02
Speaker
I think 2026 is going to be people starting to shift from education to implementation and starting to partner, you know, actually start to set up and and begin to employ those solutions with whichever partner that they choose.
00:23:19
Speaker
And then I think the following year is going to be those early adopters starting to take share because they've got the differentiated offering versus those that are still playing catch up.
00:23:30
Speaker
um A third one, which is a speculation of mine, but anecdotally is confirmed increasingly.
Challenges for Large Firms
00:23:38
Speaker
I think that ah there's still a lot of talk with the large consolidator firms about all the firms that are joining them coming in the front door.
00:23:48
Speaker
But I think there's going to be a growing story over the next couple years of of advisors sneaking out the back door when they realize that this offering wasn't what they thought.
00:24:03
Speaker
um Or because of the growing pains associated with these firms now finally having to consolidate all the things that they bought. So just to give you and a simple layman's example,
00:24:15
Speaker
You know, let's say you've bought 10 large firms, 10 regional firms, you now got to start to consolidate these things and integrate them. That means name changes that touches the client.
00:24:27
Speaker
That means pricing schedules have to start to be consolidated onto a a narrower group of pricing schedules that touches the client. Why do I have to change? Why is my pricing changing after 20 years?
00:24:42
Speaker
The third one, obviously, is the technology. All these firms use different technologies and that has to get integrated. And we all know that as as good as we get at this, that there's accidents along the way that impact clients.
00:24:56
Speaker
So again, the client has touched on that. And then the advisor who's answering all these questions and trying to keep the client happy as all these changes take place, then finds that the firms now are going to consolidate all the pay schedules for all the advisors across these firms and now their p and l is impacted a lot that's a that's a that's a that's a big prediction for for our lightning round end that's great so perfect great well we'll wrap up pete thank you so much for uh for joining the program we appreciate having you on i love being here love working with you guys i'd love to uh uh
00:25:36
Speaker
Continue to work with you and see how we can't help trade PMR solve the problems of more of these these emerging advisors. Well, great. Thanks, Pete. And thank you, everyone else who tuned in and listened. Wherever you're getting this podcast, whatever platform, Spotify, Apple, YouTube, wherever, if you can like, you can subscribe, you can share, all those things help us out.
00:25:58
Speaker
And we'll catch you on the next episode. That's right, Ryan. And make sure you watch for our next episode, as Ryan said, where we'll bring you even more insights and actionable ideas to help you grow your business. And remember, the challenge is yours to capitalize on what the future offers.
Podcast Conclusion
00:26:19
Speaker
If you want to join the conversation or connect with us, please visit us at synergize podcast.com. This content is provided for general information purposes only. The views expressed by non-affiliated guest speakers are their own and do not necessarily reflect the opinion of trade PMR or its affiliates. Trade PMR and its affiliates do not endorse any guest speakers or their companies and therefore give no assurances as to the quality of their products and services. This channel is not monitored by Trade PMR.
00:26:49
Speaker
Trade PMR does not provide investment advice, tax advice, or legal advice. Trade PMR is a member of FINRA and SIPC. Trade PMR, Inc. is registered with the Securities and Exchange Commission, SEC, and the Municipal Securities Rulemaking Board, MSRB. Trade PMR provides brokerage and account services to registered investment advisors. Custodial services provided by First Clearing. First Clearing is a trade name used by Wells Fargo Clearing Services, LLC. Member SIPC, a registered broker dealer and non-bank affiliate of Wells Fargo and Company.
00:27:36
Speaker
you