For most advisors, business is good these days, but it could be even better.
Only 32% of advisors are struggling or stagnant but an overwhelming majority feel pressed for time to meet their goals, according to Pershings Study of Advisory Success.
Some advisors would like more time so they can have a better quality of life, said Kim Dellarocca, director and head of segment marketing and practice management at Pershing, while others would like more time to develop their business.
Thirty-one percent of advisors surveyed by Pershing reported that were doing better than ever before, while 37% said they were regaining momentum that they once had.
Compared with RIAs and other advisors, wirehouse reps lagged in doing better than ever (28%) but paced the field in regaining momentum (45%).
According to Pershing, wirehouse advisors were hardest-hit by the financial crisis so they are still working on a return to where they had been.
As the overall financial advisory business picks up, more than eight in 10 advisors want to spend more time attracting new clients, Pershing discovered, and nearly as many believe that they could grow faster if they had better time management tools or processes. In fact, Pershing found that advisors are bringing in clients at a rapid clip.
Two-thirds of advisors have increased their client base in the past year, adding an average of 16%. (RIAs have excelled, raising their rosters by 20%.) In the midst of this growth, several emerging imperatives (regulatory reform, margin compression, more demanding clients, slower organic growth) will require attention for continued success while the most critical challenge, in Pershings view, will be attracting, retaining and developing the right team.
According to Pershing, 64% of advisors are concerned about having enough time to get things done. Two primary concerns occupy advisors who believe they do not have enough timedifferentiating their business from their competitors (59%) and keeping up with increased regulation (65%).
How can advisors find the time to deal with these issues? Dellarocca suggested embracing the familiar 80-20 rule.
As is the case with many types of businesses, she said, advisors tend to get 80% of their profits from 20% of their clients. Advisors should try to identify those clients, work to get more business from them, and seek other clients who resemble the profitable ones.
Pershings research found that advisors would fire 13% of their clients, on average, because those clients do not generate enough profits, consume too much time, or make too many demands. Advisors who narrow their focus to the most profitable clients may find enough time for otherwise-neglected tasks vital to long-term practice development.