Withdrawals from existing clients, on the other hand, became a noticeable sandbag on growth in the same three-year period, accounting for a 4 percent reduction in assets for high-performing firms and an almost 5 percent reduction for RIAs in general.
“The source of consolidation with existing clients has been exhausted and there hasn’t been much in terms of new asset flows,” Canter says. “By moving into new markets and new market segments, advisors are finding more success. They should absolutely consider serving younger clients with lower minimums, and if they have younger advisors in the firm, allowing those clients to be training ground. It won’t work for everyone, though. It has to be done in line with the firm’s strategy because there are a host of other issues that can come into play, like brand.”
Canter says that firms should also consider diversifying the services they offer to clients, and make sure that their clients are aware of opportunities for advice. The benchmarking study found that clients are accessing RIAs to take advantage of their investment management, retirement planning and tax planning expertise, but that advisors’ skills in estate/trust planning, risk/insurance planning, lifestyle management and philanthropic planning were underused by clients.
“I think that RIAs need to be better at understanding their abilities as a firm and communicating those to their clients,” Canter says. “They should also consider satisfaction surveys and ask for feedback from their clients. It could be that advisors are learning these skills, but might not understand what direction client needs are taking.”
The 2015 Fidelity RIA Benchmarking study was conducted between April 21 and June 15, with 441 firms participating.