Studies show that high-performing advisory firms distinguish themselves by executing specific strategies and processes that result in consistent AUM growth year over year, increased profits and higher productivity.

Here’s how they managed it:

1.  They were able to grow their assets.

Strategies included more effective sales processes, higher rates of client retention, and healthier investment performance. Time was consistently devoted to monitoring data in all three streams to identify constraints and trends in order to minimize negative impacts.

2.  They focused on wealthier clients.

Client profiling and segmentation targeted more clients with $1M+ in assets and resulted in 20% higher AUM. In addition, business development processes conveyed stronger, more compelling information about the firm and the advisory team, and best practices in marketing and business development were employed.

3.  They stuck to their Ideal Client Profile.

By showing strategic discipline in identifying and selecting prospects, high-performing firms showed that they were able to close clients more quickly.

4.  They provided bundled services in their management fees.

Typically, overall management fees included financial, tax, trust and estate planning as part of a comprehensive service offering.

5.  Clients with 1M+ assets paid higher fees.

Fees were tiered based upon assets under management for wealthier clients. This practice was phased in following a period of research that included examining the pricing strategies and practices of other firms. Fees for clients with assets below the $1M threshold were generally similar across the board.[1]

6.  Staff ratios: Fewer advisors, more support staff.

As part of long-term growth and hiring plans, high-performing firms were more effective in leveraging staff, moving a small number of activities from advisors to support staff.

7.  Advisors managed higher client and asset ratios.

By leveraging support staff, advisors were freer to work with a greater number of clients, particularly those with larger assets. A direct result were larger revenue contributions per advisor. Instrumental in implementing this practice were strategic relationship management processes and benchmarking.

Overall, planning, execution, measurement and adapting to shifting circumstances were consistent behaviors observed among high-performing teams.


[1] For more on this topic: The Strategy and Tactics of Pricing: A Guide to Growing More Profitability, by Thomas Nagle, John Hogan and Joseph Zale, Prentice Hall, New Jersey, 2011.


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