The wealth management industry is continually facing changes: new technology, the impact of Washington policy, the newly implemented DoL fiduciary rule and ever-evolving client demands.
For planners, this creates greater opportunity to advance their careers and practices, according to a recently published 2017 Advisory Authority study. The research takes a look at what is most important to RIAs, fee-based advisors and their clients.
The study focuses on two segments of highly successful advisors: those with a yearly personal income of $500 million or more from their business and those who manage more than $250 million in AUM.
Analyzing different aspects of these top performers, the study's authors were able to come up with a list of eight habits successful advisors should have.
“Our findings reveal the mindset and focus that it takes to engineer a path to success," the report says. “We believe that advisors at every level can learn from these actionable insights to build a more successful practice and establish a viable franchise for the future.”
Planners have every reason to be optimistic about that future, the report continues.
“They are fostering the creation of new business models with a level of ownership, entrepreneurship and innovation that doesn’t exist in other channels. They are a powerful force, working to drive change and conceive the future state of our industry,” the report says.
Be a tech innovator
The study shows that among the two types of successful advisors, those with higher AUM are more “tech obsessed” and more likely to considering bringing in new technology as the key to driving profitability. High AUM advisors are more likely than all others to bring new technology into their firm.
Target an emerging market of new clients
High-earning advisors have rated adding new clients as being among the most important solutions to enhance profitability. Adding new technology and targeting high-net-worth clients round out the top three. For high AUM advisors, the focus continues to be technology.
Be a market innovator
There is no denying the power of social media, and successful advisors know how to leverage this tool — especially when it comes to bringing in the next generation of clients. While high AUM advisors are more likely to focus on making upgrades to their website, high-earning advisors tend to focus on leveraging mobile technology.
As baby boomers grow older, the question on most advisors’ minds is how to successfully integrate and attract the next generation of clients.
“Year-over-year, the most successful advisors are far more likely to have an actionable strategy in place to retain clients’ heirs. This year, 90% of high AUM advisors, and 85% of high-earning advisors have a strategy to retain the heirs of their current clients, compared to only 70% of all other advisors,” the report explains.
Plan your succession
Building a strong, long lasting practice isn’t a solo act. The success of a practice cannot be tied to just one or two people. Top advisors how to build diversified ownership and strong teams that can carry a workload. Additionally, this team needs to know how to develop talent from within in order to cultivate a new generation of leadership at the firm.
Be bullish on M&A
Leveraging industry trends like M&A to benefit a firm’s growth is a trick of the trade. Both high AUM and high-earning advisors believe M&A activity in the RIA space will increase. These planners are bullish about the impact this will have on their businesses, identifying it as a way to tap into greater resources.
Put clients first
It may seem obvious, but putting clients first is a fundamental part of being a successful advisor.
Top performers “recognize that the key to the growth, health and sustainability of a profitable practice is linked to their ability to understand, align with, and serve their clients’ needs. To this end, the vast majority of successful advisors agree that offering a fiduciary model will benefit the growth of their practice, regardless of the status of the DoL fiduciary rule,” the report says.
Think like a CEO
To become a successful advisor, the report says, you must be a forward thinker. Recognize the importance of balancing your short-term goals with long-term investments in order to create an efficient operation, drive growth, achieve scale and build a franchise that will last multiple generations.