The study also brings out the fact that futuristically, advisors even widen focus over the longer-term and make strategic planning a top initiative as they seek continued growth.
In the study, RIAs reported record levels of AUM and revenues in 2011, which is attributed to the addition of new clients, and offsetting the year’s flat market performance. The median RIA firm increased revenues by 12% and AUM by 3.8%, marking a second consecutive year of record highs for the industry.
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Further, new client growth came in at 4.7% at the median, in terms of new clients net of client departures, which is flat from last year but up from 3.5% in 2009.
And as far as new clients in the door are concerned, firms grew by 8.2%, while the 20% of firms bringing in the most clients added new clients by 14.7% or more.
Jon Beatty, senior vice president, sales and relationship management, Schwab Advisor Services remarked "RIAs successfully grew their businesses to record levels in 2011 despite strong economic headwinds that the industry continues to face. RIAs have stayed true to their core mission, doing what is best for their clients, and this has won them continued loyalty of their existing clients and the trust of new ones."
Additionally, RIAs have also marked a second consecutive year of rising client retention rates, maintaining more than 97% of their existing clients in 2011.
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By GlobalDataAnd in terms of the top enablers of growth, firms cited maintaining quality of client service (81%), closing new client business (74%), implementing new technologies (63%), and maintaining efficient operations (61%).
"To take advantage of long term business opportunities and overcome hurdles to growth, advisors can develop a strategic plan that allows them to maximize their resources by prioritizing efforts across client service, operations and business development," Beatty added.
