Advisers can slice and dice peer data via Fidelity study

Registered investment advisers who participated in a Fidelity Institutional Wealth Services benchmarking study will get to track their business practices against their peers online. Fidelity and Quantuvis Consulting Inc., the firm that helped conduct the study, created an online dashboard that allows the 375 RIAs that participated in the August benchmarking survey to slice and dice the data to compare themselves with other firms of their size on such practices as marketing, referral generation and client satisfaction programs. “Our hope is that RIAs will engage and pick one or two initiatives to propel their business forward,” said David E. Canter, executive vice president and head of practice management and consulting at Fidelity. The key lesson from the study is that good strategic and long-term planning pay off for advisers, especially when they formalize their plans by writing them down. One key finding is that only 30% of the surveyed advisers — who have a combined $200 billion in client assets — have a written marketing plan, and those that do are more successful, Mr. Canter said. Another finding is that although advisers recognize the importance of client satisfaction, only 9% measure that satisfaction annually. The most profitable advisers — those the top quartile in growth, profitability or productivity — have firm operating profits adjusted to reflect earnings before owners' compensation of more than 70%, compared with around 50% for all others. They also received more revenue from referrals at 50%, versus 40%, and had a lower acquisition cost per client. The majority of firms rely heavily on principals to generate new business, though only half of the firms have succession plans to carry on if a principal leaves, the study found. Keeping clients happy enough that they will refer their friends and family is one of the biggest ways firms grow, Mr. Canter said. “Most advisers find that their clients are pretty sticky,” he said. “The challenge is adding new clients.”