The housing market is showing solid signs of recovery but what about the investment advisory industry?
The 2012 Investment News/
Moss Adams Financial Performance Study of Advisory Firms shows there is growth, but it’s mainly from increases in fees and greater operational efficiencies.
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Firms are focusing more than ever on marketing and business development. Segmentation of client audiences is creating greater alignment with client needs.
The study this year shows the industry is back on track, focusing on top strategic priorities. Business development is an across-the-board focus with some firms doing better than others.
Four areas contain key findings:
Industry financials showed AUM were basically flat but productivity was higher. Costs remained at 2003 levels, around 40% of revenues. All in all, revenue per client was higher and margins increased across the industry.
Top performers produced nearly 50% more revenue per professional and nearly double the operating profit per client. Median AUM were 33% higher and they outpaced other firms in client acquisition and size of assets acquired.
Marketing and business development has been the top focus of advisors since 2008.
Referrals are still the best source of new business but firms have trouble measuring results and putting formal processes into place.
Top performing firms used the same marketing and business development strategies as all other firms. Developing a new marketing plan and spending more time on business development and marketing were the distinguishing factors.
Pricing and segmentation showed the same percentage of firms raised fees as in 2009.
Fees rose anywhere from .21% to .53%. Larger firms correlated an ideal client with asset size; smaller firms with the quality of the relationship.
You can find out more about the report here.