Findings from the 2014 Fidelity RIA Benchmarking Study, released Wednesday, showed that many firms recognized the need to improve their marketing and business development capabilities.
Only 5% of RIAs in the study felt their firms were advanced in these areas, and 70% did not have a plan in place to guide them toward better business results—a number that has gone unchanged since 2011, Fidelity Institutional Wealth Services said in a statement.
The study explored what may be holding RIAs back from advancing their marketing and business development efforts, and examined best practices of “high-performing firms” to help RIAs learn from their peers.
High-performing RIAs excel in growth, productivity and profitability, according to the study.
It said that although many factors could contribute to a firm’s success, these RIAs stood out in several important areas of marketing and business development: firm story, targeting clients, referrals and aligning talent—strategies that may be contributing to their ability to close business in two or fewer meetings and drive more incremental growth than other firms.
“Three-fourths of firms see improving their marketing and business development as a top strategic initiative, but they are struggling to make progress,” David Canter, executive vice president and head of practice management and consulting at Fidelity Institutional Wealth Services, said in the statement.
“As firm leaders sit down to think through their 2015 strategic plans, they should consider looking to their peers for insights on what is working and ideas on where to focus to make the most impact.”
High-performing RIAs strive to tell a consistent firm story, while half firms are still struggling to establish one, the study found.
Only 56% of all firms in the study said they had a clearly defined and differentiated firm story, and only 43% said their stories were tailored to the specific needs of target clients.
High-performing firms were 1.7 times more likely to tell a consistent firm story, with all client and prospect-facing associates describing their firm and its key differentiators in the same way.
As a result, these were also more likely to agree that the majority of their clients knew the fundamentals of their firm story, which can help clients become advocates for the firm.
The study also found that while RIAs were making progress in targeting the right clients, high-performing ones were almost twice as likely to effectively communicate their target client profiles to help generate the right referrals.