Practice Management

Being picky with prospects helps a firm spur growth

Roof Advisory Group's growth plans include monitoring and shaping its client base

Planning isn’t something Jeffrey Roof believes in just for his clients. It’s crucial to how he runs his own financial advisory business so profitably.

Mr. Roof, president and chief executive of Roof Advisory Group in Harrisburg, Pa., can recite the firm’s average revenue per client — $15,000 last year — and average client size — $1.8 million — without even glancing at a spreadsheet.

These and other firm metrics are always top of mind because they’re essential to how the 17-year-old firm plans for and realizes growth. Even a goal to switch to adding 2.5 clients a month from the firm’s current rate of two per month came only after analysis and projecting the impact that extra demand will have on the whole team.

GROWTH MANAGEMENT

“One thing we have always stayed on top of is managing the type of growth we achieve,” Mr. Roof said. “Our growth is not a byproduct of what we do. We actually plan to do it.”

Roof Advisory Group received a 2014 InvestmentNews Best Practices Award in October after being identified as one of the top performers among participants in the Financial Performance Study of Advisory Firms. Of the firms studied, Roof Advisory Group ranked high in pretax income per owner, revenue per professional and for having a targeted client base.

Roof Advisory Group also ranked as a top performer in the 2013 InvestmentNews/Moss Adams Adviser Compensation and Staffing Study, as well as in the InvestmentNews Adviser Technology Study that year.

Mr. Roof said there’s no magic formula to achieving growth year over year, but the firm concentrates on improving efficiencies and doesn’t try to be a firm for everyone. In other words, it’s picky about its clients.

The firm has a $1 million minimum for clients, though like most firms, it has legacy clients with smaller sums and will occasionally make an exception for those with a potential to reach that threshold. Last year, the firm’s new client average was $2.2 million, the highest ever, Mr. Roof said.

“We are selective in the type of clients we take on — looking for those who we think we can provide valuable service to,” he said.

IDEAL CLIENT

The ideal clients for Roof Advisory Group’s financial planning and investment management services are those who have sort of haphazardly grown their assets to above $1 million and now want a more strategic approach, Mr. Roof said.

The firm’s tagline, “When you’re serious about managing your money,” calls out to those clients.

Most of the 205 families Roof Advisory Group works with are still in their high-earning years and dealing with children and, for many, aging parents. Clients, usually dual-income couples, typically own small- to medium-sized businesses or are higher-level professionals, Mr. Roof said.

Multiple people at Roof Advisory Group know each client well and they make it a priority for clients to know and feel comfortable with at least three people at the firm who they can reach out to for help. The firm’s “intimate connection” with its clients helps it retain “a really good share of wallet” among its clients — another parameter Mr. Roof tracks.