Benchmarking The Benchmarks: Schwab Versus Fidelity


The first thing that stands out is that Fidelity's new numbers -- or at least the way they're being framed for the industry press -- focus on goals and expectations.


Fidelity asked the advisors in its survey how much they want to grow next year and how they plan to do it.


That's a great source of insight into how ambitious and optimistic RIAs are about the near future.


It's useful to know, for example, that the typical advisor expects to grow the business 12% in 2012, and that only 30% of these firms have created a formal marketing plan to make that process more efficient.


Any application of the financial planning philosophy to the advisory business would indicate that failing to have a plan is essentially planning for failure -- or at least disappointment.


Schwab's most recent numbers focused on diagnosing exactly where advisors are now. They're essential for any advisor who wants to know how the firm is faring against competitors and where it fits into the big industry picture.


This kind of benchmark lets advisors measure their performance and efficiency.


If the typical firm generates 0.60% annual revenue on its client assets, for example, advisors who do better than that know they're doing okay -- and those who aren't know that they're probably not charging enough.


The two surveys line up at the intersection between present circumstances and future goals. Both sets of numbers reveal that relatively few advisors have a succession plan or formal strategic plan, much less a marketing plan.


Advisors who can align the two timeframes stand to succeed. Those who rely too much on one or the other may have a harder time reaching their goals.

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