Despite seeing the highest assets under management and compensation levels since 2007, many financial advisors appear to be falling behind when it comes to positioning themselves for future success, according to a new Fidelity study.

Almost all advisors (95%) expanded their books of business in the last 12 months, with average AUM at $62 million and average compensation at $240,000, the Fidelity Advisor Insights study found.

Yet the study found problems ahead: Two-thirds of surveyed advisors did not have a multiyear plan in place, and nearly half did not set formal career goals for themselves. Close to half weren't focusing on meeting the needs of younger investors. And two-thirds of the advisors said they believe they stand out from the competition by giving clients personal attention.

"Advisors may have been so busy focusing on the growth they've been experiencing over the last few years that they haven't had a chance to look more closely at the future," says Brian Nelson, vice president of practice management at National Financial, a division of Fidelity Investments. "But there really is a huge opportunity available to them."

So what can advisors do?

A subset that Fidelity calls "high-performing advisors" -- those who have above-average increases in AUM and share of their client's total investable assets -- have developed three strategies worth emulating, Nelson says. Here are the three things that other advisors could replicate for success:


Not only did few advisors have a multiyear plan in place; more than one-third did not have any kind of business plan at all.

By contrast, high-performing advisors were more likely to have set formal career goals, and were much more likely to have planned out different areas of their business -- such as business continuity and succession planning.

"Given the link between planning and growth," the study suggests, "advisors may want to consider placing an emphasis on developing formal plans that articulate their vision for the long term and outline clearly defined initiatives to help them get there."


About 70% of the clients of surveyed advisors were baby boomers or older, and 43% of advisors felt it wasn't important to "evolve their practice to meet the needs of a younger population." Those numbers were different among high-performing advisors; more than double the percentage of the elite group were specifically targeting Gen X and Y clients, compared with their peers.

An Atlanta-based advisor in her 50s addressed the problem by recruiting a tech-savvy college student at a local university studying financial planning. "She wanted to target the next generation and knew she needed help," Nelson says, "and was also looking for a potential successor."

The Atlanta firm now uses social media and integrates technology in client meetings and portfolio reviews, Nelson says. "It has helped them deepen relationships and target younger clients using media they prefer."

High-performing advisors were also twice as likely to target the wealthy and to ask less profitable clients to leave the firm.


According to the study, many advisors are failing to embrace strategies that will "set them apart and position them for long-term success."

After all, personal attention can't be much of a differentiator if two-thirds of all advisors say that's their competitive advantage.

By contrast, high-performing advisors "are embracing strategies, such as teaming with others, harnessing technology and customizing their offerings, to create a strong value proposition," according to the study. (Only 21% of the broader group saw teaming as a differentiator, and while 64% felt technology increases value to clients, only 35% were willing to spend money on it.)

The study also found high-performing advisors offering a wider variety of services -- such as specialized investment management, equity compensation planning, estate planning and gifting, cash management and bill paying and personal trust services.

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