Challenges related to business planning and marketing are key hurdles many advisors have to overcome to achieve business growth, according to a new FPA study.
Only nine percent of respondents indicated that their business development process is "very effective" and over half gave themselves a failing grade, according to 2014 Drivers of Business Growth, released Monday by the FPA Research and Practice Institute.
Less than a third of respondents said they had a formal, written business plan, with 33 percent saying they had defined growth goals, but not a documented plan.
Thirty-five-percent fell short of their goals last year and only 25 percent exceeded them.
“The fact that only 25 percent of advisors exceeded their business growth goals in the past year tells us that they are either not taking the necessary steps to create a plan for growth or they are engaging in the wrong marketing strategies,” said Valerie Chaillé, director of the FPA Research and Practice Institute. “It is no surprise that the advisors who are failing to plan are not reaching their desired goals.”
The study offered two solutions that can help advisors grow: defined business plans and focused marketing tactics.
Forty-eight percent of advisors who exceeded their goals had a formal, written business plan, according to the survey.
The survey also found that respondents who grew the fastest were more likely to focus on one or more defined niche markets.
Advisors who achieved faster growth indicated they were working with centers of influence to generate professional referrals.
In addition, high-growth advisors used client events as a way to add value for clients and attract new ones.