Successful advisors are putting as much thought and care into their own businesses as they are into their clients’ matters.
That’s the conclusion of “Successful Advisors: The Year Over Year Trends,” a recent special report based on Nationwide’s sweeping Advisor Authority study, an annual survey taking the pulse of more than 1,021 RIAs and other fee-based advisors of various sizes and experience levels.
The most successful advisors studied by Nationwide earned more income and managed more AUM than their peers. To be labeled “successful,” advisors had to either manage more than $250 million in total AUM, or had to earn more than $500,000 in personal yearly income from their advisor business.
More than two-fifths of successful advisors, 42%, met the yearly earnings thresholds—while the vast majority of advisors outside of Nationwide’s successful category, 97%, did not. Similarly, more than three-quarters of the successful advisors, 76%, met Nationwide’s AUM threshold of $250 million, while 100% of advisors falling outside of the successful category managed less than $250 million.
This year, Nationwide surveyed 507 RIAs, 514 broker-dealers and 824 adult investors online between February 15 and March 4.
Successful advisors, Nationwide found, generally felt they were significantly more likely to increase the profitability of their practices through 2019, held a more optimistic financial outlook for the year and trended younger than non-successful advisors. Successful advisors were more likely to come from Generation X and the millennial generation than their peers. Successful advisors also tended to have larger client bases than their peers.
But how did they achieve their success? Nationwide found seven traits that almost all successful advisors have in common:
No. 1: Successful advisors plan ahead.
Successful advisors identify trends and set new ones and remain open to change over time, while other advisors tended to “stick to the status quo,” according to Nationwide.
Successful advisors felt more confident that they would be able to increase the profitability of their practices than the Advisor Authority respondents overall, but year over year the number of advisors who feel they will increase profitability has declined in both the successful advisor cohort and among all the participants of the survey.