4 Drivers of Top Performing Practices

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Industry consultant Stephanie Bogan provided four drivers of top-performing advisory practices at an education session Tuesday at IMCA’s practice management conference.

According to recent research from Quantuvis Consulting, the top quartile of advisory practices according to assets under management, revenue and operating profit (in other words—the top-performing practices) hold these characteristics:

  • Focus on fee-based business
  • Emphasize wealth management
  • Harness human capital
  • Optimize operations

She explained a few of these drivers in more detail. For example, the top-performing practices have twice as many staff members as everyone else. Bogan explained that this doesn’t equate to 40 staff members versus 20, more like eight staff members instead of four. You don’t need a super-sized staff to be more productive and profitable, she says, but sole practitioners would be wise to bring on some help—even a part-time or contract worker—so they can focus more on revenue-producing aspects of the business.

The top-performing practices also invest three times more in operations than everyone else: $3,181 operations expense per client versus $1,000 per client.

Those top-performing practices also spend more on marketing than everyone else. Speaking of marketing, Bogan offered some words of advice: “Marketing should be simple,” she said. “It’s not a sexy thing. Pick a few things and do them over and over and over again. Yes, that’s code for boring. Just about the time you get sick of those things, they’ll begin to work.” The key, she said, is figuring out which marketing methods are best for you.

Stay tuned for the March 2011 issue of the Journal of Financial Planning, where we’ll explore a few specific marketing methods and best practices.

Carly Schulaka
Managing Editor
Practice Management Solutions
Financial Planning Association
Denver, CO

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