Despite several years of record-setting consolidation, the independent registered investment adviser space remains a highly-fragmented and diverse industry.
With that in mind, Envestnet has launched a program that lets RIAs assess their skills and strategies and determine how they stack up against the rest of the industry.
The Intelligent Financial Life Advisor Practice Score. which debuted earlier this month in partnership with the financial services research and advisory firm Aite-Novarica Group, represents the latest iteration of Envestnet’s focus in this area.
“We believe the industry needs thought leadership on this,” said Mary Ellen Dugan, Envestnet’s chief marketing officer.
“Our mission has always been to help advisers make sense of their clients’ overall financial picture and empower them to take the advice they give, and their practice, to the next level,” Dugan said.
The free, self-guided assessment, which Dugan said takes about 20 minutes to complete, evaluates an RIA across four broad categories: capabilities, engagement, wellness and planning.
The results are anonymous and are benchmarked against data compiled on nearly 500 advisers to help RIAs see how they measure up against their peers. The score goes to the individual adviser, not the advisory firm.
“This assessment provides advisers with a way to understand how well they're positioned to help clients navigate their complex financial lives through their day-to-day and more long-term financial decisions,” Dugan said. “By expanding their planning approach, advisers can help clients feel more secure in their ability to meet current and future financial obligations."
While individual advisers can use the self-assessments to gauge how their abilities measure up against the industry, Envestnet is building a robust database to provide bigger picture perspectives on the wealth management industry.
For example, Dugan pointed out that the findings show that advisers who score in the top quartile on average manage $194 million in client assets. That compares to an average of $146 million in client assets for advisers scoring in the bottom quartile.
For advisers looking for an even deeper dive into what makes advisers stand out and succeed, the platform offers a white paper, “Take the Measure of Advice: The Intelligent Financial Life Advisor Practice Score and How it Benefits Advisors’ Practices.”
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