Consistent organic growth is a major challenge for financial professionals, with sourcing new clients their primary obstacle and building multigenerational client relationships their highest hurdle, according to a recent report by Osaic.
In a study that Osaic conducted from 2020 to 2023 among 5,742 financial professionals affiliated with the firm, researchers compared participants to market performance, as measured by a 60/40 stock/bond portfolio, and to their peers. They divided the advisors into three core groups:
- Growers, with two consecutive years of assets under advisement growth greater than 3% of market
- Neutral, with market growth within +/-3% of market
- Decliners, with market growth of -3% or more versus market
From 2021 to 2023, top-growing Osaic financial professionals grew on average by 22%, compared with the market’s performance of 1.7%.
Osaic’s analysis showed that the Growers cohort had distinct attributes, and further scrutiny of these advisors uncovered four key growth personas. Most of the fastest growing advisors demonstrate a blend of these personas, Osaic noted. Still, they gravitate toward one or two of these growth personas in their businesses.
The Rainmaker
Rainmakers tend to focus on building relationships within a community, mainly through centers of influence such as CPAs and tax attorneys. They are also highly proactive in lead generation activities.
Osaic, citing Capital Group research, said high-growth rainmakers see 43% of their asset growth coming from new clients, compared with a new client growth rate of 33% for non-rainmakers.
Osaic’s own study found that the most successful rainmakers engage in specific behaviors that increase their chances of success. Rainmakers ranked the following activities they engaged in from most to least:
- Asking for client referrals
- Leveraging centers of influence, including bank/credit union referrals
- Creating educational seminars and classes
- Having a systematic lead-generation process
The Advisor as CEO
These advisors generally focus on the business as a whole and create specific goals for growth in the coming year. They develop their team, match needs with expertise, implement structure and repeatable processes, and measure results consistently.
Osaic found that the majority of the highest growth advisors employ a team-based approach, averaging $250 million in assets under management, versus an average of $80 million for solo practitioners.
Osaic’s most successful Advisor as CEO personas ranked these activities as highly important for accomplishing their growth goals in the coming year:
- Host networking or other events to prospect for/meet new clients
- Provide additional services like college counseling and tax planning
- Pursue additional certifications
The Financial Planner
Financial planners tend to focus on growing wallet share within their existing book of business, developing a repeatable financial planning process that may include charging a separate fee for financial planning.
The study showed that advisors who charge a separate fee for financial planning grow 20% to 30% more assets than peers who do not charge a separate fee, since they are recouping the value of the time they spend creating a holistic financial plan, according to Osaic.
The Private Wealth Specialist
Private wealth specialists tend to embody several growth personas. For the purposes of its study, Osaic said that these advisors have five or more investors with at least $5 million in investable assets.
Private wealth specialists usually develop expertise in multiple areas of specialization and solutions. For more complicated cases, they deploy a team of experts, such as estate attorneys and CPAs. Their most common client types are wealthy families, business owners and corporate executives.
Osaic found that advisors in this group who focus on two to three core client niches — for example, female investors, widows or divorcees, industry niches and demographic niches — tend to do better when pitching themselves to new prospects within that niche.
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