Additionally, it has been shown that strategic planning helps firms define a roadmap to achieve long-term value in their firm, focuses firms on profitable growth, ensures consistency and alignment between firms' initiatives and staff, and helps direct decisions on investments and resources.

Bringing In New Business
A full 72% of advisors surveyed identified at least one barrier to growth related to marketing and business development-making it the biggest area of concern for advisors today. Indeed, advisors' report that their top strategic initiatives for the year ahead focus on getting referrals from clients (25%) and strategic partners (16%).

Many advisors, even the largest and most successful, typically want to keep growing their businesses at a steady pace. In the current environment, generating that growth requires more time and effort. Another striking finding from the study was that advisors' median cost of gathering $1 million in new assets rose to $4,450 in 2011, up from $3,730 in 2010. Essentially, the cost of acquiring new clients increased by nearly 20%.

One reason for the higher costs in bringing in new clients is that the sales cycle has lengthened. Clients are taking their time to select their advisors and invest their assets-requiring advisors to spend more time and effort to land new business. Additionally, as firms grow, they often must navigate the transition from having a single rainmaker at the center of the firm to sharing the role among others on the team.

A solution to develop more profitable clients could be to make client segmentation part of a firm's strategic plan. Using client segmentation (the right support for each client) and a well-defined value proposition (what a firm has to offer) can help advisors identify and target ideal clients. Segmenting also helps firms analyze and optimize client profitability and cost to serve, allocate resources more effectively, evaluate pricing models, find the right people and staff to hire to grow profitably and focus on targeted growth, and create a strong career path for employees. Currently, 42% of advisors report that they have a client segmentation plan in place-a significant percentage, but also evidence that there are many advisors who still could be leveraging this key best practice. Again, in this environment, a higher level of precision can be rewarded.

Improving Firm Productivity
Nearly half (47%) of advisors see client service and operations as a barrier to their growth. As part of their efforts, 23% of firms said that "investing in technology to support firm productivity" was one of their top three strategic initiatives. Meanwhile, the percentage of firms utilizing productivity-enhancing technologies continued to increase across the industry. The average RIA firm now uses 5.4 technologies out of 8 included in the study, up from 4.4 technologies three years ago.

That said, simply adding more technology doesn't automatically generate big benefits. One key to successfully gaining efficiencies through technology is to fully leverage the technology that's currently in place and maximize its value. RIAs often find that they can achieve important productivity goals by making better use of their existing systems, and many top firms focus largely on how they can get more out of what they have. For example, they might align internal procedures and workflow with their technologies, and integrate their various systems (client relationship management "CRM," portfolio management, document management) to achieve significant productivity gains that in turn can help boost profit margins.

Advisors also continue to look to outsourcing to operate efficiently and focus on core competencies such as client service. The 2012 study shows that outsourcing data management has increased from 19% to 30% of firms over the past two years. Outsourcing client reporting increased from 15% to 20% over that same time frame, and outsourcing client invoicing increased from 8% to 13% of firms.

Here again, strategic planning can help guide decisions regarding effective technology spending and usage as well as which operational functions may be good candidates for outsourcing and how to best prioritize these choices.

Plan Now For The Road Ahead
While there are numerous growth opportunities in the RIA space, capturing that growth in an increasingly competitive, ever-changing environment will not be easy. The advisors who will best position themselves for the future will be those who identify the specific barriers to growth and opportunities within their own firms and begin addressing them right away.