Financial advisors increased assets under management 12 percent, average advisor revenue rose 5 percent and average household revenue increased 11 percent in 2013, according PriceMetrix, a practice management software and data services company.

However, client retention rates and average revenue on assets declined in 2013, according to the firm’s fourth annual State of Retail Wealth Management report, which was released today.

“Last year was a profitable year for the retail wealth management business with assets and advisor production continuing to climb, as they have every year since 2009,” commented Doug Trott, President and CEO of PriceMetrix. “It would be a mistake, however, to view this as entirely positive. Much of the growth was driven by market appreciation and there are significant questions about client retention, pricing and an aging client population going forward.”

PriceMetrix found the average advisor managed $90.2 million in 2013, an increase from $80.8 million in 2012 and $74 million in 2011.

Average advisor revenue increased to $578,000 in 2013 from $550,000 in 2012 and $537,000 in 2011.

Household revenue rose to $3,670 per household from $3,300 in 2012 and $3,175 in 2011.

However, average return on assets dropped to 0.68 percent, down from 0.69 in 2012 and 0.72 in 2011.

The study also found that client retention deteriorated across every size of household. The average client retention rate declined from 92 percent in 2012 to 90 percent in 2013.

Among households with $1 million or more in investment assets, retention dropped from 96 percent in 2012 to 93 percent last year. For households with $250,000 or less in assets, retention declined from 92 percent in 2012 to 90 percent in 2013.

PriceMetrix found that growth came primarily from existing accounts, with lesser contributions from new clients or new advisors.

First « 1 2 » Next