Over the course of her career consulting with more than 500 advisory firms, Angie Herbers has found seven common investments that the most successful advisory firms take to ensure success. Speaking at the FPA Retreat in Bonita Springs, Fla., on Tuesday afternoon, Herbers suggested that every advisory firm can take these seven ROI steps that offer the greatest return with the lowest risk.
Herbers (left), who has written a monthly practice management column for Investment Advisor magazine for seven years, and blogs regularly for AdvisorOne, told the attendees at her Retreat session that data she has gathered from her clients over the past five years shows that that firms that focus on these key ROI drivers, and on the people that work in their firms, are the most successful at “achieving systematic growth,” regardless of whether they were solo firms, ensembles or market dominator firms. That growth, she argued, will even counteract the effects of poorly performing markets, and reported that those firms following those steps limited their revenue and profitability declines to only 2% to 3% even during the 2008-2009 crisis.
Tellingly, the seven ROI steps are:
Knowing and clearly communicating your goals, deciding what the best business structure is for yourself, especially understanding the amount of control that the owner wishes to retain in the firm, and the level of income that the owner needs to generate for herself or himself.
Investing in your firm’s culture, making sure you have a clear set of core values, and that you invest in events—education and social—that help build that culture