The AssetMark Practice Management Study found common areas where firms need to focus in order to spur future growth.
The study and the resulting whitepaper were based on a year-long series of meetings of focus groups and control groups to see why adviosrs think some firms grow faster than others.
It would seem that examining the practice management of a firm, in itself, can spark growth because the study firms that drew up the recommendatons grew in value 10 percent across the board more than the control group, AssetMark says.
The study identified a number of common areas where the growth-oriented firms agreed on good practices. For instance, successful advisors are more likely to establish a formal and consistent fee schedule for clients, compared to the study’s control group. They also leverage third-party platforms and implement ways to measure productivity.
Focus group participants identified common areas where they face challenges, such as not having enough focus on the firm’s value, having difficulty in growing the client base and seeing a problem with changing client demographics.
Some of the suggestons the focus group came up with were that advisors should set minimum client fees, use retainer fees, consider revenue-sharing options and never offer discount fees to clients because it does not build client loyalty.
The firms felt they need to implement new communication strategies to recruit and lead millennial employees. Other best practices included designating a person responsible for holding the firm accountable to its goals, setting fixed time blocks to review quarterly objectives and having office staff take care of all tasks that are not advisory in nature, AssetMark says.
The group also suggested creating concrete strategies to optimize staff, have staff handle all non-advisory work and focus on differentiating the firm from its competitors. Measuring success is important, according to the study. Defined times for reviewing objectives should be set and a staff member or third party should be assigned to review all goals.