How can advisors consistently drive strategic growth?
LPL Financial set out to answer this question with its new Advisor Growth Study, released this week. The study pulled structured data from the 2018–2024 period from some 14,000 financial advisor business models, geographies and growth stages.
The data is enhanced through supervised machine learning and explainable AI to identify behaviors that lead to sustainable growth in the wealth management industry, the firm noted in its announcement.
Advisor Benchmarking
LPL converted the AGS insights into the Advisor Growth Index, an early-stage diagnostic tool for advisors and institutions that affiliate with LPL. Operating in a 1:1 consultative process between LPL and advisors, the index evaluates advisor and institution performance across client acquisition, development and retention.
“By analyzing six years of proprietary performance data from thousands of practices, spanning all business models, affiliations and stages, the AGS is unlike traditional benchmarking tools that rely on self-reported surveys,” Matthew Enyedi, chief client officer at LPL Financial, said in a statement. “We’re drawing from objective data, enhanced through supervised machine learning and artificial intelligence to identify behaviors that lead to sustainable growth.”
What Successful Advisors Do
The AGS uncovered four behaviors that distinguish the fastest-growing businesses from their peers. On average, advisors and institutions that exhibited even two of these areas experienced growth rates five times greater than their peers, LPL said.
They establish a growth foundation.
Top business growers prioritize clients with long-term potential, build operational efficiency and align infrastructure with scalable growth. They establish clear growth priorities, using data to identify one to two areas of focus and take targeted action.
For example, these businesses maintain a well-balanced client mix with a median client aged 60 or younger, and typically less than 35% of clients in the decumulation phase.
They segment their clients.
As every client has unique needs, top-performing advisors and institutions segment clients and refine service models based on factors such as assets, life stage, planning complexity, growth potential and personal fit.
LPL said segmentation best practices demonstrate that 30% to 60% of growth comes from clients with the top decile of assets under management, and approximately 35% of growth comes from clients who have $500,000 or more under management.
They deeply serve those clients.
The most successful advisors and institutions prioritize thoughtful planning and tailored support for complex needs. They focus on deepening engagement with existing clients and the next generation by using the planning process as a gateway to richer conversations and sustained relationships.
According to the data, advisors and institutions that hold 60% or more of client assets in advisory saw consistent year-over-year gains over brokerage.
They use data to drive client acquisition.
With an intentional approach to new client acquisition, high-growth businesses use data to target high-potential prospects by leveraging strategic M&A opportunities, centers of influence and digital marketing.
The data showed that top advisors and institutions achieved high rates of new client acquisition — 10% or more of clients are new each year — with the average new client asset under management increasing year over year.
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