This is an extended version of the profile that appeared in the May issue of Investment Advisor, part of AdvisorOne's Special Report profiling this year's members of the IA 25, the most influential people in and around the advisor universe. See the complete list and Special Report schedule for extended profiles of all the 2011 members of the IA 25.

To be counted among the most successful firms, advisors have to focus on understanding and building enterprise value. It's a trend that Julie Littlechild, president of Advisor Impact, is already seeing take shape.

Julie Littlechild, Founder/CEO, Advisor ImpactLittlechild founded Advisor Impact in 1998, and since then has worked with financial services firms to provide research on how to improve productivity and profitability through client engagement.

"RIAs are taking a hard look at their existing businesses and asking if they are building true, long-term enterprise value or creating a lifestyle business," she told Investment Advisor. "Many are focused on the former and that is creating a much sharper focus on defining and then improving the drivers of enterprise value, including team development, process, technology and branding, all of the things that create value over and above the individual contributions of the partners."

Part of understanding that value requires a focus on financial fundamentals. Value is linked to growth, Littlechild notes, and advisors who were confident turning away business and relying on passive referrals in the past may see their business's long-term value fall.

With an emphasis on growth – partly on offshoot of the recession – advisors are recognizing their faults, previously hid by a good economy.

"We’re seeing many of the most successful businesses taking a more proactive approach to positioning for referrals, recognizing they are not maximizing their referral potential," Littlechild notes.

(Littlechild presented the findings of her research on referrals at the 2011 FPA Retreat.)

While the aging boomer population has been touted as a major opportunity for advisors, Littlechild sees a downside there, as well. She acknowledges that advisors have "good reason" to focus on high-net-worth clients in their 50s or older, but the most successful businesses, she says, recognize that "an aging population may be a threat to the long-term viability of their businesses if they are not bringing in new or younger clients."

To that end, advisors are shifting the way they see their target market. "We’ll see a strong focus on multi-generational planning, and more advisors looking for an effective business model to service younger clients, which may mean a separate service group or even a separate brand," she says.

With that shift, Littlechild says, advisors will have to come to terms with an "often uncomfortable need" to adjust the way they communicate with younger prospective clients.

The biggest challenge for advisors, Littlechild suggests, may be that the actions and ideas that made them successful in the past are unlikely to work in the future.

"Senior partners need to take a significant step up from the day-to-day process of managing clients and look at the big picture," she says. To do so, advisors should ask themselves, "Do I want to build a business that lives beyond me and the current management team or am I looking for a more formal exit?"

Littlechild suggests advisors take a "hard look" at their goals to determine the business model that will help them get what they want. Advisors need to recognize the gaps between how they build and manage their firms and what they will need to build long-term sustainable value.

"Better still, I would suggest they do this with an outside party, which could be a regional manager or another (perhaps younger) advisor, who will ask them the tough questions," she advises.

Read more about the rest of the IA 25.

Don't see someone on this year's IA 25 that you think belongs there? Submit their name and your justification for why they should be considered among the most influential people in and around the advisor universe in the Comments field below. We promise to consider reader nominations, but please, no ad hominem attacks on those who were named in this or past years.–Ed.