6 Steps That Set the Fastest-Growing Firms Apart

What You Need to Know

Many advisors have been so preoccupied with calming existing clients that they've overlooked a key priority: scaling their business.
The fastest-growing advisory firms are achieving results through the effectiveness and efficiency of their staff, systems and processes.
Step one: Make sure your firm is focusing on forward-looking growth metrics.

The drastic changes we’ve experienced within markets over the past few years have been a major test for financial advisors. The persistent focus and dedication have been on keeping clients calm during turbulent market conditions, ensuring portfolios are rebalanced and well-positioned for the future and planning for clients’ life events.

While commendable and vital to our business and to holistic financial plans, this strategy may be hindering advisors’ ability to achieve one of their own key priorities: scaling their business.

According to our recent research, published in partnership with the Financial Planning Association, financial advisors face significant challenges in growing their businesses. While 46% of advisors say they are comfortable with their current growth trajectory, a mere 12% strongly agree with that sentiment.

Against this backdrop, and as new business development remains a perennial challenge for many financial advisors, let’s explore our recent survey findings and the six critical factors we’ve identified for advisors to better navigate their growth objectives.

1. Set the Right Goals in Your Business Plan

The components of a business growth plan spell out a firm’s potential to expand. Nearly all of the fastest-growing firms we surveyed agree that they have a clear plan to drive growth (84% versus 59% of other firms). The top three goals featured in a typical business plan include the number of new clients (81%), new revenue (78%) and new assets (71%).

Although it’s important to consider financial metrics in informing your goals, these are lagging indicators of business growth, which advisors tend to favor in their business plans. For example, if you’re focused on increasing the number of new clients, it may be helpful to include specific goals around increasing the number of prospects in your sales funnel and your prospect-to-new client conversion rate.

The fastest-growing firms tend to track and favor leading indicators in their business plans, including client satisfaction, client attrition, staff growth and retention. Tracking your progress is crucial to achieving each goal; keeping a close eye on progress can help identify early warning signs that you may need to modify your strategy.

2. Prioritize Asking for Business

Most advisors are aligned in what they believe are the most important contributors to growth. However, there is a distinct gap between what advisors value and what they’ve acted on. When asked about circumstantial issues that may impede growth, advisors point to competing interests, lack of time and clarity and capacity restraints.

An advisor’s mindset can be a powerful force to derive motivation and inspiration, but it can also hold them back. When asked what the number one mindset impediment was, 43% said they worried about being too “pushy” or “salesy.” This presents a major challenge for advisors seeking to grow their practice; if an advisor’s comfort level with asking for business is not developed over time, it could be detrimental to their business and prospecting.

3. Take a Team-Based Approach

It may not come as a surprise that a larger team can drive bigger, faster growth than an individual advisor. However, deciding to hire is often greatly debated before firms make an offer. That said, of firms with less than $100 million in assets under management, 90% do not have a team. Although firms may be hesitant to form a team, the research is clear that teams can onboard more clients than individual advisors.

4. Have the Right Processes in Place

An overwhelming majority (89%) of advisors agree that having the right processes and systems is critical to business growth; however, only 59% say they have completed this work. These processes and systems are instrumental in attracting and onboarding new clients, keeping staff from experiencing burnout, and achieving desired client satisfaction results.

Having a process and the supporting systems in place to efficiently qualify and continue to nurture prospects is as fundamental to your sustained success as the ability to generate new business leads. These pillars provide the mechanism to engage with prospective clients and guide them through an easy and seamless onboarding experience without overwhelming your resources.

5. Actively Engage Your Ideal Clients

It’s encouraging to see that more than two-thirds of advisors say that at least 50% of their clients reflect their ideal client profile.

However, when you compare the fastest- and slowest-growing firms, the firms that have added 10 or more clients in the previous 12 months are more likely to have taken steps beyond identifying their ideal clients to intentionally designing an experience based on their specific needs, challenges and preferences.

This underscores the importance of not only defining your ideal clients but actively engaging them in a manner that will resonate and eventually drive new business.

6. Develop the Right Mindset

In addition to uncovering the circumstantial and psychological impediments to growth, we also sought to understand the extent to which advisors would describe themselves as exhibiting certain characteristics such as grit, optimism, curiosity and resilience.

Interestingly, in comparing the fastest- and slowest-growing firms, we learned that the faster-growing firms are more likely to rate themselves higher on the scale than slower-growing firms, which may result in higher confidence, which affects their overall ability to generate growth.

It’s clear that the fastest-growing advisory firms are achieving their results through stronger execution, particularly related to the effectiveness and efficiency of their staff, systems and processes. Take time to reevaluate your vision for your practice, your business model and the barriers inhibiting your growth and identify the next steps you can take to start driving impactful change.