Let’s start with a story. John frequently traveled to a small town in a rural area in western Texas. While there, he happened upon a small café that served a basic breakfast for a good price, and it became a regular stop on his trips. He started to notice the short-order cook, observing his movements as he prepared the meals ordered by the customers. The man used utensils that, though sparkling clean, appeared well-worn by habitual use over a long period. The cook rarely looked when he reached for a pan or a spatula; everything he used was always exactly where he needed it. His motions were repetitive, almost choreographed. John came to think of the cook’s work as a kind of performance: no wasted motion, one movement blended seamlessly into the next, always resulting in the preparation and delivery of the expected product, exactly when and where it was needed. There was a kind of beauty in the efficiency of the execution of even such a mundane task.

Indeed, efficiency is the lifeblood of any successful financial advising practice. When managed properly, the time spent with each client or prospect produces the maximum benefit for the firm in terms of revenue, relationship enhancement, clientele growth, and marketing reach. RIAs know that maximizing productivity is the key to healthy and sustainable growth.

And yet, as Michael Kitces points out in a recent column, advisor productivity, whether measured by average clients served or revenue generated per advisor, has remained basically flat for the last ten years. This, despite the boom in advisor technology. While fintech has certainly benefited many back-office operations, the essential “human touch” that provides the reason most clients seek professional advising in the first place seems to bring with it a self-limiting factor that imposes a barrier to increased efficiency in clients served and revenue generated.

In this connection, RIAs who are part of the Dimensional Funds ecosystem enjoy some advantages that are not available to other firms. Consider the following:

  • Readily available portfolio modeling. Dimensional Funds’ “Wealth Models” provide an easy-to-use, off-the-shelf means of providing differentiated portfolio models suitable for the needs of most types of investors. Advisors need not spend hours “re-inventing the wheel” for each client.
  • Consistent messaging, backed by solid research. In good markets and bad, clients want to know that a steady hand is on the wheel. Having one philosophy helps messaging remain powerful and understandable. Dimensional’s rigorously analytical approach to the markets provides advisors with the information they need to help clients “stay in their seats” when the going is choppy.
  • Tax- and expense-efficient portfolios. Dimensional’s disciplined, empirically driven investment approach means that clients are less likely to see the type of high-velocity trading in their accounts — including the associated fees — that can limit net investment performance.
  • Back-office efficiency. By following a consistent model approach, while allowing for reasonable substitutions for tax reason, more of your trading can be completed by your associate trader than having to involve advisor time. The result is a better more consistent return experience across clients and less advisor time spent, a win-win!
  • Clear definitions for Investment Committee and the SEC. Following a consistent approach that is low-cost, diversified, and consistent across the entire client base is the definition of what a prudent RIA should be executing. DFA allows you to accomplish this in a way that is easily justifiable within your Investment Committee charter document and allows for company-wide portfolio oversight.
  • Dimensional Separately Managed Accounts (SMAs). This service recently expanded to portfolios with a minimum size of $500,000, enabling advisors to offer personalized investment solutions to clients. Available parameters include tax efficiency, minimum capital gains impact for concentrated positions, ESG screening, and other value-added portfolio construction tools.
  • Better long-term results. Ultimately, what clients expect is performance that helps them reach their most important financial goals. Dimensional’s track record of success through various market cycles allows advisors to feel confident in their recommendations. That confidence translates to more satisfied clients, more referrals, and more growth for the practice.

As a part of the Dimensional Funds “family,” Wealth Advisor Alliance has experienced first-hand the benefits of access to Nobel Prize–winning financial research, solid, time-tested investment philosophy, and dependable reporting, all of which is available through Dimensional Funds. To learn more about how your RIA firm could benefit from these advantages, please click here.


Schedule an Appointment: Schedule a meeting with Advisor Development Officer Brian Shapiro to talk through which entrepreneurship path might be right for you.

We help advisors establish and grow successful wealth management practices. To learn more about how we can help you amplify your life’s work, contact us at team@waalliance.com. You can follow us on Twitter@theWAAlliance and on LinkedIn.

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