Slowing revenue growth in advice business will impact career development

Advisory firm growth has been in decline for three years and the dangers of that extend beyond smaller budgets and lower business valuations. Slower growth threatens the advisers’ personal development, according to one industry expert.

The rate of growth in the industry is important because it defines the rate at which firms can develop the careers of their employees, said Philip Palaveev, CEO of The Ensemble Group, at the InvestmentNews Best Practices Workshop in Boston on Tuesday.

“Each person is looking to grow — grow their income, their responsibilities, their careers, and their intellectual capabilities,” he said. “But if the firm is not growing, there is really no room to grow and their careers slow down.”

The median revenue growth for advisory firms was about 5% last year, down from 8% in 2015, 14% in 2014, and 16% in 2013, Mr. Palaveev said in presenting the findings of the 2017 InvestmentNewsAdviser Compensation & Staffing Study. The research was sponsored by Pershing Advisor Solutions.

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Some firms are growing faster than others, of course, and InvestmentNews recognized 21 firms on Tuesday with 2017 Best Practices Awards.

These firms rank among the top quartile of more than 700 independent advisory firms that participated in the 2017 Adviser Compensation and Staffing Study and the 2017 Adviser Technology Study. The businesses range in size but have one feature in common.

“Their leaders have a clear plan and vision for growing their firms and managing elite organizations,” said Mark Bruno, associate publisher at InvestmentNews and head of InvestmentNews Research.

A dozen firms were recognized for their growth and profitability and were identified as having superior compensation and staffing practices: ACG Wealth, Accredited Investors Wealth Management, CJM Wealth Advisers, Dowling & Yahnke Wealth Management, EisnerAmper Wealth Management & Corporate Benefits, Foster & Motley, JMG Financial Group, Johnson Investment Counsel, Private Vista, Roof Advisory Group, Sage Financial Group and Wacker Wealth Partners.

Nine firms were acknowledged for their technology practices: Asset Management Group, Balasa Dinverno Foltz, Center for Financial Planning, Etesian Wealth Advisors, Fierston Financial Group, Nvest Financial Group, Sensible Financial Planning and Management, Strategic Wealth Management Group, and The Burney Company (Burney Company Investment Management).

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Yonhee Gordon, principal and chief operating officer of JMG Financial, attributes her firm’s success to its focus on a career path for all of its 50 employees and supportive salaries and benefits.

“There’s a huge investment that we put into our people,” she said.