10 Success Secrets of Top Advisors

2. They invest in growth.

LPL’s study also found that top advisors were “taking growth to the next level by putting more time and money” into client acquisitions, and training and technology.

The study showed that the top advisors typically spent more than two times as much as other advisors on marketing and business development.

“They also consistently pursue and invest in multiple marketing channels, usually ask for client referrals, express appreciation for their clients through events or gifts, build referral relationships with professional centers of influence (such as attorneys or CPAs), maintain their website, and perform email, social media, and digital advertising campaigns,” the study said.

The top-producing advisors also “regularly invested consistent amounts of money (more than $40,000 annually) in training and technology to keep up with their growth trajectory,” the study said.

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3. They closely monitor their financial results.

Top advisors typically reviewed their business and financial results on a “frequent, consistent basis,” according to LPL.

They also compared themselves to industry and peer benchmarks, sought the perspectives of their business partners and other advisors, and decided on next steps.

The top advisors were also 20% more likely than their peers to “close their books on a monthly basis,” according to LPL. “While many advisors believe that a quarterly close is sufficient, a monthly close provides three times the number of checkpoints on your business each year, which helps them see potential cash flow constraints on the horizon before it becomes a larger issue,” the study said.

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4. They have a succession plan.

Compared with other advisors in the study, the top 10% of advisors were: 40% more likely to have a long-term successor identified, 60% more likely to have legal agreements and a funding mechanism in place, and 25% more likely to have communicated their succession plan to clients, according to LPL.

The top-producing advisors tend to take their own advice about preparing for their retirement to protect their legacy and the monetary value of their business, the study said.

Over 66% of the top advisors in the study had their long-term successor identified, according to LPL.

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5. They stick to their asset minimums.

Pointing to Cerulli Associates U.S. advisor metrics from 2022, the study said that, “industry wide, nearly two-thirds of advisors agreed that serving too many non-ideal clients was their top productivity challenge.”

Although it could be difficult to turn a prospect away, the “opportunity cost of your time grows along with your business,” the study said.

“One method to attract the right prospects is to have a publicly stated minimum” assets under management amount or a revenue threshold for new clients, according to LPL.

The top advisors in the study were 60% more likely than other advisors in the study to establish those minimums and consistently stick with them, the study said.

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6. They outsource and use models.

Seventy-one percent of top producers in the study outsourced two or more owner duties, such as human resources, accounting/bookkeeping, administration, marketing, technology, and cybersecurity. And 95% of the top advisors had a models-based practice, “eliminating most time spent customizing investments,” the study said.

Seventy percent used a rebalancing tool, such as LPL’s Enhanced Trading, making them three times more likely to use trading automation solutions to help save time in routine rebalancing of those models, the study said.

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7. They prioritize business continuity.

The top advisors in the study are “hyper-focused on short-term business continuity,” according to the paper.

Dependency on a firm’s key person is a common risk among independent advisors.

One important test of resilience is the ability of each staff member to cover the duties of at least one other person. Seventy-seven percent of top advisors in the study had a staff member who could cover the duties of at least one other staff member.

Having an emergency fund to cover expenses and carrying sufficient insurance are crucial. On average, top advisors in the study had a minimum of a six-month emergency fund versus just four months for all other advisors. They are also more likely to carry worker’s compensation, commercial property coverage, and cyber/data breach insurances.

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8. They deliver advice through all stages of a client’s financial life.

From LPL’s research, top advisors do that by supporting broad advice needs, including college, estate, legacy and tax planning, charitable gifting, and caring for aging parents.

Often, those topics are as emotionally complex as they are financial, so “not all advisors acknowledge the importance or understand how it can be a differentiator,” the study said.

But advisors who focus on every aspect of their clients’ financial lives may see greater loyalty, satisfaction and retention.

Most advisors in the study offer investment management or financial planning. But top advisors were 53% more likely to offer estate planning, 41% more likely to offer tax planning and strategy, 28% more likely to offer retirement plan consulting, and 17% more likely to offer insurance.

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9. They break a holistic approach into smaller processes.

The top advisors in the study indicated they believe a holistic approach should be broken down into “smaller, repeatable processes built on good client data,” the study said.

For example, it said, when onboarding new clients, advisors should make sure they have a “detailed, comprehensive discovery process to gather all necessary data as well as an equally thorough process to update that data throughout the client relationship.”

A common pitfall in comprehensive advice is leaving potential gaps between what clients expect as a service versus what is delivered. That’s a risk when providing additional services that are inherently more complex, according to the paper.

One significant way to prevent perceived service gaps is to identify which services are truly comprehensive and communicate only those to clients and prospects, which helps manage client expectations from the start, LPL suggests.

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10. They embrace their personal values.

Citing Cerulli data, the study said up to 70% of advisors fail within the first three years.

“The most common challenges advisors attribute to a practice failing are difficulty finding clients, burnout, or lack of fulfillment,” the study said. “Burnout and lack of fulfillment point to why it’s so critical to build your practice around your values.”

Over 70% of top advisors said they felt their businesses were “highly” aligned with their values, making them almost 40% more likely than others to feel that way.

Additionally, almost 90% of high performers have a written value proposition or mission statement publicly posted and almost 90% incorporate their personal values into written client selection criteria.

“Letting your current and future clients, team, and professional partners know your values and criteria attracts those who are the right fit for your practice,” the study said.

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