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8 Traits of Highly Successful Advisors

Registered investment advisors (RIAs) and fee-based advisors are a powerful force — growing rapidly, driving change and shaping the future of the industry. They are advocates for greater simplicity, transparency and choice, and they are committed to creating greater client value. In addition, research shows that more investors now expect and demand the benefits of holistic and unbiased guided advice.

RIAs and fee-based advisors also are creating new business models, with a level of independence and innovation not seen in other channels. Independent ownership is a key to their success. They’re not just employees — they’re entrepreneurs. They can create value and unlock it — for their clients, for their employees and also for themselves.

What drives the most successful RIAs and fee-based advisors — those who earn more and have more assets under management? How do they evolve from being an advisor to being the CEO of their own firm? How do they manage their practice to create efficiencies, achieve scale and build a franchise for the future?


The Eight Common Traits

To help all advisors learn from these top performers and engineer their own path to success, we commissioned an annual study of roughly 1,600 RIAs, fee-based advisors and individual investors nationwide. This year, we published a special report that is focused on two types of successful advisors: high-earning advisors, with personal yearly income of more than $500,000 from their advisory business, and advisors with high AUM, who individually manage  total AUM of $250 million or more. As we studied these two segments in depth, we identified eight traits of these highly successful advisors.

1. They think like a CEO. When it comes to managing their practice, successful advisors act like business owners and think like CEOs. They are more focused on every aspect of building a practice for the future — from new technology and innovative marketing to expanding their client base and cultivating their in-house team.

2. They are technology innovators. Successful advisors understand the power of technology to create an optimal client experience on the front end and greater

efficiencies on the back end. Year over year, successful advisors are more likely to spend more on technology and adopt more technology into their practice.

Our study found that this year, those who manage more AUM are even more tech-obsessed than other advisors. When compared with all other advisors, high- AUM advisors are more likely than all other advisors to add interactive websites (57 percent) mobile technologies (57 percent), and tools for risk management (56 percent). They are also more likely to prioritize tax optimization tools (44 percent) and artificial intelligence (38 percent) than all other advisors.

3. They target new clients. Year over year, the pursuit of profitability is a top priority for all advisors. And the push for new clients is a top driver. With an eye to the future, successful advisors balance their focus on an emerging generation of millennials, Generation X investors in their prime earning years and baby boomers, who continue to control the largest percentage of assets. Adding new high-net-worth clients is a far greater priority for successful advisors (35 percent), especially the high-AUM advisors (43 percent) when compared with all other advisors (27 percent).

4. They are marketing innovators. Although all advisors say they prioritize adding new clients, the most successful advisors are far more likely to have new strategies to attract the next generation of investor. Both high-AUM advisors (78 percent) and high-earning advisors (70 percent) are far more likely to change their marketing strategies to attract the next generation when compared with all other advisors (59 percent).

5. They retain their clients’ heirs. Determined to retain a share of the $30 trillion that baby boomers will transfer to the next generation, the most successful advisors are far more likely than all other advisors to have an actionable strategy in place to retain clients’ heirs. The vast majority of high-AUM advisors (90 percent) and high-earning advisors (85 percent) are far more prepared to act on this opportunity when compared with all other advisors (70 percent).

6. They plan their succession. Successful advisors understand the importance of establishing a succession plan for their firm. They build teams, not only to optimize current workload but also to cultivate the next generation of leadership. Both high-AUM advisors (72 percent) and high-earning advisors (81 percent) are far more focused on succession planning when compared with all other advisors (64 percent).

7. They are bullish on mergers and acquisitions. Successful advisors leverage industry trends like M&A to grow their firms. Whether buying another practice or selling their own, successful advisors are optimistic about the impact of M&A and consolidation as a way to tap into greater resources. Both high-AUM advisors (66 percent) and high-earning advisors (61 percent) are far more optimistic about the impact of consolidation and M&A activity when compared with all other advisors (47 percent).

8. They put clients first. Successful advisors make communication and one-on-one relationships a priority — ensuring clients know they are heard and understood. They know that the customer experience is a competitive advantage fundamental for the growth, health and profitability of their practice. They understand that putting clients first is not just a regulatory requirement — it’s a key driver of their business.

Engineering your own path to success means taking decisive action and proactive measures. Identify your greatest opportunities, tackle your greatest challenges and take the time to actually work on your business. Be disciplined, be willing to make changes and let things go. You may lose clients in the short term. You may lose revenue in the short term. But in the long term, it’s an investment in your future success.

All advisors define success differently. Not all successful advisors have the same priorities. But they all focus on one or more of these eight traits to achieve the optimal outcome — creating greater value for their clients, driving greater growth and achieving greater profitability for their firm. 

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