Learning how to say "no" to bad prospects and
structuring your firm around a focused strategy are among the traits of
some of today's most successful advisory firms, according to a new
study.
The study by Schwab Institutional, a division of
Charles Schwab, looked at the characteristics of what it described as
the 28 Best Managed Firms. The firms were judged by a number of
factors, including profitability, productivity and the revenue
generated per client.
The annual revenue per professional at the best
managed firms is about $467,311, compared to an average of $200,360 for
fee-based firms, according to the study.
The study cited four key traits shared by the firms:
They pursue ideal opportunities only. "The most
successful advisors have instituted disciplined methods for identifying
and pursuing select types of new business that fit extremely well with
their overall strategy," write the study's authors.
They structure their firms around a cohesive strategy.
They institutionalize their business processes,
deriving consistent performance from "systems and processes that work
reliably and predictably every time."
They delegate to maximize effectiveness.
Successful firms, according to the study, know how
to say "no" to bad prospects, as well as existing clients. It cited as
an example an advisor who fired two of his biggest clients seven years
ago and quickly bounced back with the "realization that survival didn't
depend on any one client."