Emigrant Partners' Mark Bruno sits down with Andrew Leonard, founder of Geometric, to explore what true specialization looks like in the RIA space. By focusing exclusively on partners at the top management consulting firms, Geometric has built a differentiated, fast-growing firm rooted in expertise and discipline. Andrew discusses organic growth, navigating the “dangerous middle,” hiring ahead of scale, and why clarity of client—and saying no—are the real drivers of success.
Summary
- Why Growth Matters: Andrew Leonard emphasizes that growth should be intentional and driven by specific reasons: creating career paths for talented team members, serving more clients in a niche where the firm is the best, benefiting existing clients through enhanced services (like in-house tax), and ensuring that new partners' investments are worthwhile. He warns against growth for its own sake and advises firms to define their 'why' before pursuing growth.
- Power of Specialization: Geometric's success stems from a ruthless focus on a narrow niche: partners at Bain, BCG, and McKinsey. By developing deep expertise in their compensation, tax complexity, benefits, and private investment platforms, the firm creates an offering that is clearly superior for that segment. This specialization leads to high referral rates and inbound demand, making growth a natural byproduct rather than a constant struggle.
- Navigating the Dangerous Middle: As firms grow from roughly $250 million to $2-3 billion in AUM, they enter a phase of negative economies of scale where margins compress due to necessary investments in senior leadership and infrastructure. Andrew notes that Geometric experienced margins dropping from 40-50% to the high teens before stabilizing in the mid-20s. The key is to balance growth, investment, and profitability while accepting that this period is challenging but temporary.
- Hiring Senior Leaders: The hardest decisions in scaling involve when and how to hire senior non-client-facing roles like COO, CIO, or CCO. Andrew advises hiring a department leader when the team needs more strategic leadership, technical expertise, or people management than current part-time efforts can provide. He shares that Geometric hired a COO at around $500 million AUM and a CIO later, emphasizing that finding the right cultural and philosophical fit is critical.
- CEO Self-Awareness: Geometric built a fully in-house tax team of five people, despite widespread advice against it. The key to success is that the niche's tax complexity is uniform, allowing the team to become world-class experts in that specific area. This integration improves client outcomes and experience, and gives the firm full control over the quality of service. Andrew advises generalist firms to think carefully before attempting this, as it is expensive and talent is scarce.
- In-House Tax Services: Geometric built a fully in-house tax team of five people, despite widespread advice against it. The key to success is that the niche's tax complexity is uniform, allowing the team to become world-class experts in that specific area. This integration improves client outcomes and experience, and gives the firm full control over the quality of service. Andrew advises generalist firms to think carefully before attempting this, as it is expensive and talent is scarce.
- Employee Ownership Strategy: Geometric is 100% employee-owned, with 11 partners and a path to ownership for all team members. Andrew explains that selling to a larger RIA or private equity would dilute the firm's niche focus and culture. Instead, they sell ownership internally at a discount to external market value, distribute shares broadly, and plan for eventual succession. He notes that founders must accept that future generations may eventually sell externally, and that's okay