The Essential End-of-Year Checklist for RIA Owners • Financially Simple


As we approach each new year, it’s important to take a moment to reflect and assess where your business is at. Doing so can help you solidify your goals for the coming year and provide some clarity as you work toward the eight-figure exit. As an RIA owner, an end-of-year checklist is essential. However, you may be surprised by some of the items I believe should be on that checklist. In this blog, I’m going to discuss the five items I believe you should include in your firm’s end-of-year checklist.


Follow Along With The Financially Simple Podcast!

This week on The Financially Simple Podcast:

  • (00:41) Tempus Fugit

  • (02:19) Celebrate the Wins

  • (03:54) The CEO and the Receptionist

  • (06:09) Financial Review

  • (09:18) Will Your Current Goals Continue Into the New Year?

  • (12:05) Annual Compliance Review

  • (14:04) Rest & Reflect


End-of-Year Checklist for RIA Owners

As I began preparing for this entry, I was reminded of the Latin term, Tempus Fugit. You might have heard it before, but it basically means, time flies. Friends, that’s what it feels like as we stand on the brink of the year’s end. It feels like just yesterday we were ringing in this year, and now we’re about to enter into 2024. With the coming year comes new opportunities.

Friends, it’s a prime moment to evaluate the current state of your Registered Investment Advisory (RIA) practice and determine where you want to go in the new year. I believe the first step in this process is to look at your end-of-year checklist. But why? Well, end-of-year checklists, for RIA owners, aren’t just about compliance; they also offer a unique lens into the overall health and trajectory of your firm. So, let’s take a closer look at five things I believe should be included in your firm’s year-end checklist.

#1: Celebrate Wins with Your Team

First, I want to challenge you to celebrate your team’s wins with them. As business owners, our drive propels us toward growth and innovation. Yet, we often act as though we can only celebrate—or even acknowledge—major victories. However, I believe this should extend beyond major achievements to include recognizing the everyday victories that contribute to your firm’s success. Doing so often yields positive results for you and your team.

I’m reminded of a story I recently heard, where the CEO of a major corporation was walking into a meeting and paused to speak with the receptionist. During their brief interaction, the CEO offered praise and encouragement for a recent accomplishment in her career. Afterward, the CEO was asked why he bothered acknowledging the receptionist’s achievement. He responded by saying, “This young woman is the gatekeeper in our company. At this moment, there is no one more important, in my purview, than this young lady and the accomplishments she has achieved.”

The young receptionist overheard the entire interaction and was filled with pride. At the same time, she was humbled that the CEO of this major enterprise cared about what she had achieved. This was the encouragement she needed to press forward and now, she is an executive within the company.

You see, acknowledging wins, big and small (and at all levels within your firm), fosters a positive work culture. In fact, according to a report by Vation Ventures, 69% of employees would work harder if they felt their efforts were genuinely appreciated. This time of year presents us with a fantastic opportunity to recognize the accomplishments of our teams. You’d be surprised what a simple, “attaboy” can do for your firm’s morale. So, number one on my end-of-year checklist is to celebrate wins with your team.

#2: Review Your Financials: Year-to-Date & Trends

Next, take a comprehensive look at your year-to-date financials. How have you fared in terms of budgeting? Did you meet it? Were you over or under budget? What strategies can be implemented to boost profitability and margins in the upcoming year? You see, this is your chance to say, “Okay, we had a profit margin of X over the past year. What can we do to increase that margin by 0.5%?” This financial introspection not only aids in better budgeting but also positions your RIA for a more prosperous future.

During my time as an instructor at the Exit Planning Institute, I learned something called the 5x5x5 strategy. I always begin thinking of this strategy when I’m reviewing my end-of-year checklist. If you’re not familiar with this strategy, it goes like this: What can you do next year, to increase your top-line revenue by 5% (there’s your first five)? What can you do to reduce Sales and General Accounting (SGA) expenses by 5%? And finally, what can you do to increase your margin by 5%?

You see, what I love about this strategy is that it forces you to examine the details across multiple areas of your business. For example, increasing your top-line revenue often involves working on your marketing and sales departments. Similarly, cutting your SGA expenses will typically involve people, operations, finance, and legal. Friends, you’ve just covered six key areas of your business with your first five-by-five! Finally, increasing your margin requires creativity and ingenuity. It’s an unbelievable strategy.

#3: Evaluating Your Goals for the Current Year

My third checklist item is goal-oriented, like myself. If you’ve followed me for any amount of time, you probably know that I love to set goals. More than this, I want the goals to be in writing. So, for the third item on our checklist, I like to reflect on the goals we set for the year and determine whether they will continue into the new year.

As you cast your goals for this calendar year, you must ask yourself a few questions. Were they clearly defined, and were they achieved? Consider the reasons behind success or setbacks. What will you do differently in the coming year? You see, goal evaluation isn’t just about the past; it also sets the stage for the future. Friends, this is why I’m always touting the importance of comprehensive strategic planning.

You see, 71% of fast-growing companies have strategic plans, business plans, or similar long-range planning tools in place. This is because implementing a strategic plan adds accountability to your team and doubles your chances of success. Therefore, you must evaluate your firm’s goals and implement strategies to achieve them.

#4: Finish up Your Annual Compliance Review

Friends, navigating the regulatory landscape is a critical aspect of operating an RIA. In fact, rule 206(4)-7 under the Investment Advisers Act of 1940 requires an annual review of policies and procedures. Now, I’m not going to go through an exhaustive list of items that should be in your annual compliance review, but there are certainly some big items that you don’t want to miss.

For example, be sure to submit your Form ADV Amendments. Likewise, be sure to update your Form CRS, as lapses in compliance can have serious consequences. In 2022, the SEC made a press release on the severity of the subject. In that statement, Sanjay Wadhwa, Deputy Director of the Enforcement Division said, “With today’s actions, the SEC has now charged forty-two financial firms for failing to meet the obligations that are required to ensure retail investors understand their relationships with their securities industry professionals. We urge firms that continue to be delinquent in fulfilling their Form CRS obligations to come into compliance with the law and to self-report to the SEC.”

The SEC’s actions against firms failing to meet their obligations underscore the importance of staying vigilant. Adding your required annual compliance review to your end-of-year checklist is an easy way to mitigate your firm’s compliance risks.

#5: Rest & Reflect

My final checklist item may surprise you because as business owners, it’s so ingrained in our minds that we must always be busy with growing the company. Although I hope you’re working throughout the year to make your firm more valuable, it is important to also take care of yourself. You see, in the hustle and bustle of your daily operations, the clarity of your vision for the firm can get lost. Without that clarity of vision, inevitably, your business just begins to drift aimlessly, with no clear direction for what you’re trying to achieve.

Now, if you’re reading this and thinking, “Justin, I don’t have time to just stop,” consider this… If your firm can’t function in your absence for a few days, it isn’t set up for an eight-figure exit. On the other hand, if it is capable of functioning without you pulling the levers, and you just feel the need to constantly be busy, I get it. As business owners, we almost come to enjoy the struggle. There’s always something that needs our attention and expertise. However, without taking time to rest, you can become blind to what really needs to be done. The law of diminishing returns begins to set in, and nobody really benefits from all of your effort.

As Brent Cassell, VP of the HR group at Gartner, wisely puts it, “Rest is not the absence of performance. It’s part of performance.” Friends, taking time to rest isn’t a sign of weakness. Take a moment to step back, rest, and reflect on the past year. Jot down your thoughts for a future review. This not only recharges your batteries but also contributes to long-term success.

Wrapping Up…

Look, as you look toward the coming year, balancing preparation with moments of reflection and celebration is key. Hustle to equip yourself and your firm for the challenges ahead, but also remember to slow down, appreciate the journey, and celebrate the milestones, great and small. By taking a time for reflection, you can position your RIA for sustained success and, perhaps, that coveted eight-figure exit.

Friends, I know life is hard, but it’s still so good. We have so much to be thankful for. Preparing for a new year can be frustrating, but it doesn’t need to be. By working through your own end-of-year checklist, you can make next year at least, financially simple. Let’s go out and make it a great day!.

Have questions about this or other ways to improve your RIA firm? Reach out to our team to learn how we could help you work toward your goals!



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