Growth by Design 2012: Why Unrestrained Growth Is No Good—And How to Avoid it

Following FA Insight’s 2010 “Growth by Design” study, the firm revisited the challenges a firm faces to achieve growth and the new challenges that arise as it does so.

FA Insight’s Eliza De Pardo and Dan Inveen co-authored another series of articles that breaks down the 2012 iteration of the study. They found that while growth is necessary to maintaining a functioning and profitable firm, it can get carried away. Unrestrained growth can lead to problems in human capital and erode profit margins.

“Growth is the lifeblood of the independent advisory industry,” De Pardo and Inveen wrote. “Mismanaged growth can put firms at risk, however, stressing their foundations and threatening profitability.”

Click through the following slides to browse each of De Pardo and Inveen’s articles on the 2012 “Growth by Design” study. Visit the archive here for all our Growth by Design coverage.

Striving for Sustainability: 2012 Growth by Design Study, October 2012

Growth is the lifeblood of the independent advisory industry. In addition to greater rewards to firm owners in the form of increasing returns and higher share value, the potential benefits of growth extend to employees as well as clients. Growth creates career opportunities and greater earning potential for staff. Growth can help broaden a firm’s resources and deepen its technical expertise, resulting in improved quality of client service delivery.

Mismanaged growth can put firms at risk, however, stressing their foundations and threatening profitability. To achieve sustainable growth, firms need to take a deliberate approach, one that FA Insight describes as “growth by design.” With a thoughtful, strategic approach, firms can take advantage of economies of scale, build value and protect profitability.

Read more from the October 2012 issue of Investment Advisor. Visit the Growth by Design archive here.

Growth Gone Wild: 2012 Advisor Growth by Design Study, January 2013

The great majority of advisory firm owners fixate on growing their businesses. It is a fundamental characteristic of their DNA. And why not? Multiple positive outcomes can be achieved as a firm grows and achieves greater scale. These aspirations, however, frequently overlook the very real risks that rumble beneath the growth trajectory and threaten to derail firms when growth goes wild.