How do top performers build and run their practice to create greater value for their clients and their firms?
“RIAs and fee-based advisors who recognize the trends driving industry change and proactively adapt can achieve greater growth and leave the competition behind,” according to a new study from Nationwide Advisory Solutions (formerly Jefferson National).
Sounds obvious, so why aren’t more advisors doing it?
The report, “Path to Success: Adapt—or Be Left Behind,” defines successful advisors as those who earn a personal annual income of $500,000 or more from their advisory business, or individually manage a total AUM of $250 million or more.
From among the top traits, advisors can start to create their own competitive advantage by considering these five:
Be a tech innovator—One factor which sets successful advisors apart from all other advisors is their focus on technology. Successful advisors rate adding new technology the second most important factor for driving profitability over the next 12 months, while all other advisors rate it fourth. They also rate integrating technology the second most important practice management priority over the next 12 months, while all other advisors rate it fifth.
Harness the competitive edge of artificial intelligence—Among advisors who are at least somewhat familiar with AI, successful advisors, as compared to all other advisors, are far more optimistic about AI’s impact on financial planning, far more likely to use AI in their practice, and far more likely to add AI or add more AI in the next 12 months. They use AI to transform every aspect of the customer experience, from the front-end to the back office, opening the door to a new category of client, offering a new universe of products and solutions—and ultimately gaining an edge over the competition.
Put clients first—Successful advisors know that putting clients first is the foundation for a thriving practice. It all begins with a fiduciary standard. Successful advisors, as compared to all other advisors, are far more likely to strongly agree that there should be one federal fiduciary standard across the financial industry. By aligning with their clients’ best interest, successful advisors earn their trust, deepen the advisor/investor relationship—and bring more assets under management.
Target an emerging market of new clients—Year-over-year, the pursuit of profitability is a top priority—and the push for new clients remains a top driver of profits for successful advisors. Many experts say successful advisors take the extra measure to define their ideal client—identifying who they are, what they do and their top concerns—to customize their practice and specialize their services to meet clients’ most important needs.
Be a marketing innovator—The most successful advisors are far more likely than all other advisors to change their marketing strategies to attract the next generation of investors. This year, successful advisors say increased use of mobile technology is their top solution to attract the next generation of investors, followed by increased use of social media and working more with a client’s family and children, to build a foundation for the future.
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.