Standard Life has launched A Measure of Success, an in-depth study of best practice in market leading financial advice firms.

Developed in conjunction with NMG Consulting, A Measure of Success reveals useful insight into how leading financial advice firms have achieved their success with useful tips for the wider adviser market.

The findings, based on qualitative data from 25 principals, owners and managing directors of leading adviser firms from around the UK, show although no single formula for success exists, there are many similarities among the firms studied.

The report identifies seven key attributes that leading advisory businesses all share:

  • Strong leaders with a consistent vision, who set clear direction and expectations
  • Employees who put the firm’s interests before their own
  • The structure of the business follows its strategy
  • Clarity of who and what the business is
  • Regulatory change is embraced
  • Clear, regular and open communication with both clients and employees
  • A culture of continuous improvement and operational excellence
  • Critical success factors

The research also reveals that of these attributes – three are critical success factors which many adviser firms may want to emulate: excellent leadership, a culture open to change and operational excellence.

Having a strong leader ensures that everyone in the business knows their role, can positively contribute to the business and ensures a strong focus on the customer. The research shows that a strong leader should enable a culture of continuous learning, set clear direction for the business and be obsessed with quality and customer experience.

According to the research, a culture that is constantly embracing change is vital for a successful adviser business. This helps firms prepare, and often stay one step ahead of potential changes to regulation and market demand. A successful adviser firm knows not only when change is required, but how opportunities or changes in the market relate to their business model and brand.

Taking a continued ‘consult and listen’ approach and always being ready to improve is demonstrated as the best way to gain staff and supplier support as well as maintaining clear business direction.

The research also uncovers that retention is key to a business’ success. Results show that even successful firms are dependent on a small number of customers generating revenue for the business – with 89% of revenue coming from only 11% of a firm’s customers and, on average, advisers have 93 active clients each.

The report also shows that 60% of leading firms are generating operational excellence through an increased use of paraplanners and support staff.

Innes Miller, head of Business Services at Standard Life said: "We wanted to understand the attributes that enable certain adviser businesses to be so successful – a combination of delivering a positive outcome both for the client and the business. While no single business model or client proposition stood out, we did discover a set of consistent behaviours, activities and processes that combine effectively to drive a business forward through change and beyond. There is a clear theme: successful advisory businesses do not "carry on" until regulatory pressure of financial necessity forces change on someone else’s terms. They seek to control their own destiny through strong leadership and efficient execution."

Jane Craig, research partner at NMG Consulting said: "What unites the firms in the research is the commitment to the process of change and the persistence to see it through – sometimes at great personal or business expense. They demonstrate that the combination of strong leadership and operational excellence is vital for long-term success. You can’t have one without the other. These leading firms show that advice businesses run like professional organisations with robust disciplines and practices are those that will succeed in the long run."