Why do some advisers succeed while others continue to struggle to grow their business and feel left behind? Clearly, successful advisers do things differently from others to be ahead of the pack.
A study conducted on behalf of Nationwide Advisory Solutions by The Harris Poll reveals traits of successful financial advisers. The survey covered 1,800 financial advisers and individual investors who reside in the U.S. The study defined successful advisers as those who earn a personal annual income of $500,000 or more from their advisory business, or individually manage a total AUM of $250 million or more.
- Stay one step ahead
Successful advisers stay one step ahead of their peers. This means being agile, anticipating new trends ahead of others and adapting their business models to capitalise on emerging opportunities. Reflecting this trend, the survey found that year over year, the most successful advisers are somewhat more likely than all other advisers to expect the profitability of their practice to increase over the next 12 months (79% vs. 71%).
How do they achieve this growth? Successful advisers relied less on adding new clients than all other advisers and consistently put more focus on adding new technology, consolidating technology and adding new hires. This shows that adding new clients may not necessarily be a recipe for success. Rather, improving client experience and retaining existing clients helps advisers build sustainable businesses.
- Tech innovator
Successful advisers adopt technology to improve efficiencies, accuracy, enhance client relationships, attract the next generation of clients—and ultimately to drive profitability. They are likely to adopt tools like risk management, risk monitoring and portfolio stress testing technology and robo advice into their practice in the next 12 months.
- Put client interest first
Successful RIAs and fee-based advisers know that putting clients first and adhering to a fiduciary standard are paramount for the growth, health and profitability of their practice. By understanding clients’ perspectives and creating alignment with their best interests, successful advisers earn their clients’ trust, deepen the adviser/investor relationship, create greater loyalty—and ultimately bring more assets under management.
- Customer Experience
Brands are known for the experience that they provide rather than just for their products. Amazon and Netflix have created unique experiences by offering more choice, providing greater access and anticipating customers’ needs—to satisfy them in ways that they didn’t even expect. Many successful advisers are using technology to not only build better practice but also to create better experience for clients. Also, technology is helping them free up time to focus on one-on-one relationships.
- Retain heirs
Successful advisers define and target their ideal client—who they are, what they do, their motivations and concerns and where they are in their life and in their financial lifecycle. They are increasingly looking at targeting next generation of clients who are likely to inherit a substantial portfolio of wealth. Successful advisers are far more likely than all other advisers to have a strategy in place to retain the heirs of their current clients.
- Protecting downside
Successful advisers are more likely than all other advisers to have a strategy in place to protect their clients against market risk. To protect their clients from market volatility, successful advisers adopt solutions like diversification, including fixed income strategies, smart beta ETFs and non-corelated assets in client portfolios.