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July 28, 2020 at 06:06 PM
What distinguishes the best performing RIAs from all others?
According to Schwab’s 2020 RIA Benchmarking Study, the top 20% of performers have adopted several practices at much higher rates than their peers:
- A written strategic plan
- A written succession plan
- An ideal client persona
- A documented client value proposition that deepens with the addition of value-added services
The adoption rates of these practices by top-performing firms ranged between 66% and 75% compared to 44% to 66% for other firms, and they paid off.
For example, firms that had adopted an ideal client persona and client value proposition attracted 28% more new clients and 45% more new client assets in 2019 than other firms, according to the benchmarking study, which was based on a survey of 1,010 firms with a total $1.1 trillion in AUM conducted between January and April.
In addition, top-performing firms used digital touchpoints such as texting, e-signatures and virtual client meetings and screen sharing more frequently than other firms, and they had a greater focus on net organic growth — assets of new clients minus assets of departed clients — which can help offset the impact of volatile markets. More of those top performers also adopted standardized workflows within their customer relationship management system for more than 50% of tasks.
