Over the next year, Fidelity's RIA group is segmenting its advisor clientele into four groups-wealth managers, financial planners, investment managers and mutual fund managers-and creating service teams to work with them.

    Advisors have an expanding marketplace to choose from. Lanigan notes the United States has 3.3 million millionaire households, and that number is expected to grow to 4.3 million by 2007. Current millionaire households have total investable assets of $7.4 trillion, which is expected to rise to $10.4 trillion by 2007. Studies also show that 77% of those with at least $1 million in investable assets use some type of advisor-a figure that leaves a sizable part of the market underserved. "The good news is that there will continue to be a strong demand for advice," Lanigan says.   

Among the programs offered by Fidelity is a Practice Advantage product, which includes marketing and practice management services for the company's advisor clients. Lanigan says the company also plans to launch this year a product that will help advisors who are new and looking to grow, advisors who want to manage growth, and those who may transition their businesses.

    Another avenue advisors need to explore is alternatives to traditional asset-based pricing, according to Tibergien. This is an area in which advisors have traditionally been reluctant to dabble, fearful that a pricing change will alienate clients. That outlook, however, is starting to change, Tibergien says.

    "There has been kind of a culture of being an apologist for charging, and slowly but surely I see this momentum changing among the elite advisors," he says. "Advisors on the fee side are becoming more sophisticated in their pricing schemes and are probably going to be able to withstand the pressures a little better."

    The top firms, he says, are taking a closer look at the value they bring to clients and pricing accordingly. Some are incorporating both an asset-based fee and a retainer fee or are implementing fees tied to the complexity of a client's financial situation.

    Another area of the business that needs to be focused is marketing, experts say, particularly since advertising and marketing budgets are being squeezed by regulatory compliance needs and other types of fixed overhead. One study by AdvisorBenchmarking.com, for example, found that advisors were hit with a 153% increase in legal and compliance-related costs last year. The most common way advisors dealt with the increases, according to the study, was to cut advertising and marketing budgets and rely more on client referrals for finding prospects.

    How can RIAs get their message out on a small budget? The Internet provides one cheap alternative, says Joseph Murtagh, president of The Source
wealth management in Goshen, N.Y., and the author numerous articles on financial marketing. "You need Internet access and a computer, that's it. The budget is your time," Murtagh says.

    He suggests periodic Internet newsletters, written for a targeted audience, as an effective and cheap way to reach out to prospects. For example, Murtagh says, an advisor may want to reach corporate executives with articles about deferred compensation, stock options or how to get better returns on their retirement savings.

    Good writing skills are not mandatory, he adds. At $7 to $10 per hour, an advisor can usually hire a college intern to polish up a financial article,
Murtagh says, adding that the information is what's important.