Advisors expect revenue growth this year, according to an SEI poll, and 53% expect increases of more than 15%. However, only 15% said they have a growth plan that they follow and monitor.
SEI concluded that advisors should more formal processes and strategies for achieving and maintaining growth in these competitive times.
Following up, SEI suggested five growth strategies for building long-term business value:
Know Your Niche
“Go back and look at your book,” said John Anderson, head of practive management for the SEI Advisor Network. Segment the clients. Don’t look at what is important to you (AUM or revenues), but what is important to them. Segment them by associations, by types of employers, by hobbies, and so on. You probably will find either a niche or the beginning of a niche that you can develop further.”
In the short term, advisors can start to leverage relationships within that niche by looking look for introductions to others. Longer term, advisors can invest in education around the niche, as Anderson put it. “Join the meetings, subscribe to the publications, be visible in the groups,” he said. “Understanding what is going on the in the minds of those in your niche will position you as the ‘go to’ person in that niche.”
Create a Firm Culture
Advisors tend to spend a great deal of time trying to make themselves indispensable to clients, according to Anderson. “To grow,” he said, “advisors need find a way to keep the firm indispensable. Start with client teams for all service meetings; add staff bios and pictures to the corporate website. Empower your staff to fix issues that come up and share the credit.” For the longer term, possible tactics include allowing junior people to buy into the firm and changing the name of the firm.
“Too many advisors think of marketing as an expense,” Anderson said. “It should be an investment in the businesses, involving all key stake holders.”
He said he has participated in marketing meetings, providing an outside platform provider’s point of view at to what is working. Marketing plans should be in writing, with a budget. Staff members should all have tasks and deadlines.
Strengthen Your Team
Anderson sees an industry of too many generalist firms with generalist advisors. “Encourage a team environment and professional designations,” he said. “Look at the next generation of advisors and prepare for what they will be looking for in an employer.” That might be a training program or excellent technology, he added.
Evolve Managing and Governance
A successful advisory firm should be evolving from a practice to a business. “Look to create more operational efficiencies,” Anderson said. “Detailed systems should be incorporated for client on-boarding and for client service. Rely upon outsourcing partners to eliminate non-client-facing activities.” Advisors should have a vision for the next decade as opposed to the next quarter.
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