Some accuse RIA firms of minimal confidence in their business development strategies, and insist they're not implementing strategies to improve that.
Fidelity Institutional Wealth Services, the custodian to $750 billion worth of RIA clients' assets in 2013, has an interest in changing that.
Their 2014 RIA Benchmarking Study sets out to define the marketing and business practices of the highest performing firms, in the hope of motivating stagnate counterparts.
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A lot of factors contribute to success, but Fidelity's study suggests all of the "High-Performing Firms" excel in marketing, and that leads to increased business development.
That seems to bear out in the bottom line. High-performing firms averaged 17 percent growth between 2010 and 2013, compared to their peers' average of 11 percent.
They weren't always the biggest firms, nor the wealthiest, but what set high-performing plans apart in the study was the revenue generated per advisor, as the most efficient firms averaged $825,000 per advisor, when the rest of the pack averaged $588,000.
And they claim to close business more quickly. Almost 90 percent said they so in two or fewer meetings, which only 60 of more static firms claimed as much.
The average RIA firm seems to be suffering a crisis of confidence when it comes to their marketing strategy. Only 5 percent consider themselves advanced in the area, and 70 percent don't have a new business development plan in place, a number that has remained unchanged since 2011.
"Three-fourths of firms see improving their marketing and business development as a top strategic initiative, but they are struggling to make progress," said David Canter, head of practice management and consulting at Fidelity Institutional Wealth Services.
More reason to look at what successful peers are doing, Canter said.
The highest-performing firms tell a consistent story, but barely half of all firms say they have a clearly defined one, and 43 percent say they tailor their firm's pitch to the specific needs of individual clients.
That capacity to consistently and effectively communicate a firm's value proposition translates to more referrals for clients and centers of influence, according to the study.
But few firms have what Fidelity calls an "advanced" referral process. High-performing firms are four times as likely to leverage referrals, which account for 75 percent of new business among all RIA firms.
Only 14 percent of firms said they've analyzed their client base to target the best sources for referrals. But successful firms actively groom their client base to not only understand and reach out to potential centers of influence, but to also understand their clients' client base, and the potential for the RIA to send reciprocal referrals.
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Nick Thornton
Nick Thornton is a financial writer covering retirement and health care issues for BenefitsPRO and ALM Media. He greatly enjoys learning from the vast minds in the legal, academic, advisory and money management communities when covering the retirement space. He's also written on international marketing trends, financial institution risk management, defense and energy issues, the restaurant industry in New York City, surfing, cigars, rum, travel, and fishing. When not writing, he's pushing into some land or water.
