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How Advisors Dodged ’08 Meltdown: FA Insight Study

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Congratulations, advisors. The years since the financial crisis were a struggle, but you made it work. FA Insight has the numbers to prove it.

FA Insight’s fifth annual study found that in a period marked by a global financial meltdown that took out the likes of Lehman Brothers and Bear Stearns, advisory firms managed to maintain practices that withstood the crisis and in 2012, “achieved the highest profitability and greatest level of owner income of any FA Insight study year.”

FA Insight addresses the findings its 2013 People and Pay study, which focuses on how human capital helped firms achieve those results, in a series of four in-depth articles, which you’ll find on the following pages.

Advisors, Take a Bow: 2013 People and Pay

Advisors, Take a Bow: The 2013 People and Pay Study

This article addresses the key finding of the 2013 People and Pay study; namely, that a firm’s “investment in human capital is a complex but crucial foundation of sustainable growth.”

“In years past, even slim growth expectations often lulled firms into lapses in management discipline,” according to authors Eliza De Pardo and Dan Inveen. “Five years of FA Insight study data show that firms have not yet forgotten hard lessons learned during the recession. While firms are clearly benefiting from the current recovery in security markets, their financial results suggest that management practices have also improved.”

Read the full article.

Advisor Pay Climbs as Talent Remains Scarce: 2013 People and Pay

Advisor Pay Climbs as Talent Remains Scarce: FA Insight Study

It’s a simple case of supply and demand; when the pool of talented workers dries up, hiring the best is expensive. The 2013 People and Pay study found the best firms were maximizing return on their labor forces by considering both financial and nonfinancial motivators.

That doesn’t mean bringing in lunch on Fridays or putting a foosball table in the break room, but giving employees something that will ultimately make them better workers.

“Firms demonstrate a commitment to personal and professional growth by preparing and overseeing individual development plans for every team member, helping them grow and succeed in their current position while preparing them for the next steps in their career,” according to Dan Inveen and Sarah Pelonio.

Read the full article.

How Your Priciest Advisor Can Boost Profits: The 2013 People and Pay Study

How Your Priciest Advisor Can Boost Profits: The 2013 People and Pay Study

The most experienced advisor is also the most expensive, and as the demand for advice increases without a commensurate increase in talent, firms find themselves overly dependent on their lead advisors.

The best firms are easing that dependency by looking to new sources for additional talent and grooming younger advisors to step up to lead advisor roles, but they’re also helping their current lead advisors work smarter by leveraging non-professional staff.

Read the full article.

Team Up to Stand Out: The 2013 People and Pay Study

Team Up to Stand Out: The 2013 People and Pay Study

Another way firms can get the most out of their highly paid lead advisors is to build qualified teams to support them. It’s no coincidence that the industry’s “best and biggest firms are three times more likely than their large-firm peers to maintain a team-based service structure,” according to Eliza De Pardo and Dan Inveen.

Sustainability is one of the most compelling advantages to a team-based approach. “Teams ensure client relationships do not depend entirely on any one individual and that those relationships will last beyond the tenure of a single professional,” according to the authors. “Teams also provide natural career paths for developing employees poised to become the next generation of lead advisors.”

Read the full article.


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