The decade-long bull market did wonders for many bottom lines — but do you know how successful your firm would be apart from market growth? A firm’s ability to grow organically, regardless of market conditions, is crucial to its success. Here are seven key things firms should keep in mind as they strive for organic growth:

  1. Deliver greater value. Firms that are growing organically are going beyond asset management, engaging a holistic financial planning mindset and helping clients achieve peace of mind and life goals — what we call “delivering on the top of the value stack.” Our research shows that there is demand for those services: Nearly half of millionaires surveyed in our 2018 Millionaire Outlook Study want higher-level value stack services. Some firms are leveraging managed accounts to help them more efficiently manage money, freeing up time for advisors to have more meaningful conversations with clients. Many firms are also bringing in mutual fund assets held away to help them better see their clients’ full financial pictures.
  2. Offer a comprehensive suite of solutions, not just products. Offering a full suite of solutions — including things like 529 plans, charitable giving options and health savings accounts — enables advisors to seamlessly integrate their services with clients’ financial plans. Creating a holistic plan is an important first step, but you also want to be able to deliver the tools needed to bring that plan to life.
  3. Segment and prioritize. To achieve organic growth, firms need to work toward providing a world-class service experience, but that doesn’t mean being everything to everybody. Segment clients and create appropriate service models for each group. This enables firms to better serve niches, like high-net-worth clients, and grow that business. Think about ways to personalize the experience for high-producing advisors, such as a call if a signature is missing versus an automated alert.
  4. Make recruiting a priority. Competition for advisors is fierce, with almost a quarter switching firms in the past five years, according to our 2018 Advisor Movement Study. Nearly three-quarters of advisors who made a move identified a better firm culture as a benefit to switching, so firms need to have a clearly defined culture and share it during the recruiting process. Consider having recruits spend a day with the team to understand what the vibe is like and how they’d fit in. Our research also showed that fear of the unknown tends to be a significant concern when advisors are thinking about switching firms, so make sure to explain how advisors will be supported during and after the transition.
  5. Retention is equally vital. Of course, recruiting new advisors is one way to grow organically, but firms also need to have plans to mitigate advisor attrition. Technology is one piece of that — firms should aim to provide integrated technology platforms that simplify advisors’ day-to-day. Also, think about ways to support advisors while setting the culture apart. Some firms build advisor teams including specialists in client service, planning, next-gen and more. The result is better-supported advisors who are more equipped to meet client needs and manage more assets — a win for their bottom line and the firm’s.
  6. Don’t lose sight of scale and efficiency. Our data shows that the largest firms had the highest median organic growth rates in 2017, which points to the importance of scale. What’s more, Cerulli’s 2018 U.S. Broker-Dealer Marketplace report found that year over year, broker-dealers with more than $10 billion in assets under management expanded assets by an average of 12%. Think about ways to increase advisor efficiency, including incorporating technologies that can help them work smarter. When it comes to technology overall, firms need to be thoughtful about their choices. They can be successful by building their own technology or working with strategic partners — the most important thing is that the platform meets the needs of advisors and investors.
  7. Identify a unique differentiator. The firms achieving the most organic growth have found ways to differentiate themselves in the marketplace. That can mean targeting a niche audience, offering a specialized service model, building a unique technology platform and more. In today’s competitive landscape, firms need to identify what sets them apart from the competition, and work on growing that advantage.

At Fidelity’s recent M&A Leaders Forum, industry leaders agreed that firms demonstrating at least some level of organic growth are more attractive to buyers. So, regardless of a firm’s ultimate goal — whether it’s developing a future-ready business or preparing for a potential sale — it’s important to remain focused on growing organically.


Carolyn Clancy is executive vice president and head of the broker-dealer segment for Fidelity Clearing & Custody Solutions.