Establishing written plans with clear key performance indicators is a major differentiator between average and top advisors.lankogal/iStockPhoto / Getty Images
As the end of the year approaches, many advisors are taking stock of their business growth and how it measures up to goals set for revenue, client acquisition and team members. Those who aren’t should be.
Capital Group’s annual Pathways to Growth advisor benchmark study – which examines the skills and processes that set fast-growing advisor practices in the U.S. apart – shows that establishing written plans with clear key performance indicators is a major differentiator.
This may be obvious for revenue and assets under management, but the report says the biggest gulf between top practices and average ones is in measuring the softer skills for client acquisition.
The highest-growth advisors were 77 per cent more likely to have a written marketing plan that prioritizes activities related to retention and prospecting. That includes using digital marketing and social media to engage with clients and tracking data to measure the success of referral-generation programs.
The top practices also worked with clients on a “referral story” that explains how clients benefited from working with the advisor, and they had a consistent brand identity as well as a clear picture of their ideal client.
The report also found the table stakes for advisors are getting more expensive. The gap in services offered by average and top advisors is shrinking, but the highest-growth cohort is still much more likely to offer tax and charitable planning to differentiate themselves.
Perhaps surprisingly, the high-growth advisors had younger clients. The report said that’s likely because they’re working across generations within families and “may stand a better chance of retaining or even growing their practice when life events put money in motion.”
Spending time on marketing, goal-setting and making inroads with clients’ asset-poor children may sound nice, but where does an advisor find the time?
The top cohort was way ahead on automating routine tasks (and measuring the return on technology investments). They also spent far less time on investment management than average advisors, adopting model portfolios at a higher rate.
“The highest growth advisors follow the advice often given to clients: Focus on what you can control,” the report says. “That means less time spent researching the market and more time spent on client acquisition.”
This all may sound very familiar, in which case you can pat yourself on the back and return to your end-of-year evaluations. But if you’re not doing this? New year’s resolution time is just around the corner.
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