How financial advisers can stay ahead of the competition

Advisers who compare themselves to the competition have a better chance of staying ahead. Check out eight ways to get ahead and stay ahead.
DEC 11, 2013
Advisers who compare themselves to the competition have a better chance of staying ahead. That's the advice Mathias Hitchcock, vice president of Fidelity Institutional Wealth Services, gave to advisers at the Fidelity Inside Track conference in New York. His lecture dove into data from Fidelity's 2012 RIA Benchmarking Study. (The 2013 version is set to roll out later this year.) Mr. Hitchcock focused on how high-performing firms — those in the top 25% in the industry in terms of profitability, assets under management over a three-year period and productivity as a measure of earnings before owner's compensation — are outperforming the competition. There isn't one thing that separates high-performing firms from the rest of the pack. Overall, it's a matter of gaining assets through better sales effectiveness, investment performance and client retention, Mr. Hitchcock said. Looking at the data as a whole shows some ways they are a “little bit better” across numerous industry benchmarks, he said. “We see this very clearly as being a story of strength across the board,” Mr. Hitchcock said. “It's a very significant difference in business performance.” Here are eight takeaways from his panel discussion: 1. Seventy-two percent of top firms close business in two or fewer meetings. That compares to 53% of other firms. 2. Only 3% of high-performing firms stray from their “target client” profile. That compares to 11% of all other firms. “They get better at telling the same consistent story to the same consistent client and that does have an impact,” Mr. Hitchcock said. 3. Top firms focus more intently on larger client relationships. 4. They are more likely to bundle services in their overall management fees. 5. High-performing firms have seen assets grow an average of 20% over the past three years. Other firms have grown assets an average of 12%. 6. Top firms manage an average of 3% more assets per client. 7. On average, top firms have a more diversified staffing model. The largest allocation of their head count, 45%, is designated “other staff.” Forty percent of their staff is advisers and 15% is management. For other firms, advisers make up the majority of staff positions. 8. High-performing firms have an average of 80 clients per adviser, versus 64 clients per adviser at other firms. The firms also manage an average of $113 million in assets per adviser, versus $75 million per adviser for other firms.

Latest News

Gen X and millennials are rethinking retirement as pensions disappear
Gen X and millennials are rethinking retirement as pensions disappear

Eight in 10 pre-retirees say the US retirement system wasn't built for them and most still haven't planned how to make their money last.

Cerulli: Advisors struggle to turn 401(k) savers into wealth clients
Cerulli: Advisors struggle to turn 401(k) savers into wealth clients

Just over 10% of advisors' wealth clients come from defined contribution plans, as capacity, data and technology gaps block the bridge to wealth

Alto to buy Forge Trust from Schwab in self-directed IRA push
Alto to buy Forge Trust from Schwab in self-directed IRA push

Deal creates a $20B-plus custody platform for private market investing in IRAs, months after Schwab closed its Forge Global purchase

Wall Street bonanza! The Street on track to hit a record $90 billion in profits: Report
Wall Street bonanza! The Street on track to hit a record $90 billion in profits: Report

Despite the good times, advisors should tread carefully, said one veteran industry executive.

Most workers have retirement plans but no retirement strategy
Most workers have retirement plans but no retirement strategy

Gallagher data reveals a huge gap in financial confidence between employees who work with an advisor and those who don't.

SPONSORED Built on insurance experience to deliver on long-term promises

Knighthead Life entered the market with a competitive MYGA. A strong launch earned advisor confidence and paved the way for FIAs.

SPONSORED In the Age of AI, Trust Becomes the Advisor's Greatest Asset

As AI makes financial information more accessible than ever, Lana Hock explains why human judgment, trust, and empathy remain the qualities clients value most in a financial advisor