It is gratifying when others reinforce your work. Maya Ivanova, in an article in Investment Advisor Magazine, explains that the best RIA/FA Firms(Teams) have several things in common. In a study of all RIAs, her firm Rydex AdvisorBenchmarking concluded that the top 26 were rather unique verses the others in the difficult year 2008:
They grew their practices by 6% on AUM(Assets Under Management) vs the average where assets slid by 12%
They were proactive in contacting their clients spending between 40 and 50 hours/wk with clients vs 11-15hrs for the average. The results were dramatic. The best lost only 1% of their clients vs 21% for the average.
The top firms had much larger clients and fewer of them. The top firms served on average 126 clients with $1.3 million in AUM vs 140 clients and $485,000 AUM. The results were not only higher customer retention nd satisfaction, but higher profitability for the firm.
The Supernova systematicly provides the plan, process and rituals to perpetuate this type of success.
The authors conclusions were simple:
1. Spend as much time as you can with your clients. Firms that spend 60% of their time with clients are eight times more profitable than the averages
2. Focus on fewer clients with higher net worths
3. Every single top firm focuses it’s client aquisition efforts on specific market niches
4. Measure your activity. The top firms know where their teams time is being spent. Determine your critical critera and measure it vs the best and you will improve.