Growth by Design
over the years ahead (see Figure 4, right). Nearly 70% of advisory firms expect new business development to have a major
impact on their future growth. This compares to just 43% of
firms who indicated that their business development strategy
was an important contributor to their recent growth.
Targeted business development strategies should be an
integral component of any robust strategic plan. However, for
a majority of advisory firms, both strategy and implementation in this area are limited. In 2014, just 13% of firms reported their marketing plan to be effective. Half of all advisory
firms do not have a marketing plan at all. For those seeking
to grow through more aggressive business development, new
capabilities may be required.
Strategic Planning Sparks Action for
Sustainable Growth Firms
FA Insight defines sustainable-growth firms as those achieving strong growth without encountering any of the negative
impacts of growth. The 19% median revenue growth in 2013
for sustainable-growth firms was nearly four percentage
points higher than their peer firms. For those firms looking
to establish greater strategic planning skill, the sustainable-growth firms may set the best example for what is possible.
When it comes to strategic planning, this group demonstrates a greater ability to convert their plans into action. Team
members have a greater awareness and understanding of the
firm’s strategic plan relative to other firms. Furthermore,
implementation details for how to meet plan objectives are
more likely to be in place.
Sustainable-growth firms follow a similar approach with their
marketing efforts. They are more likely to have a marketing plan
and more likely to report their marketing plan to be effective in
attracting new clients. To ensure successful plan implementation, the sustainable-growth firm is more apt to have an individual dedicated to marketing oversight.
It is important to recognize that the distinction between
sustainable-growth firms and others is not necessarily the quality
of their strategic thinking. In many cases, it is their ability to convert strategic thinking into action that creates shareholder value.
Roll Up Your Sleeves
Whether the focus is an election campaign or business growth,
even the savviest strategist will fail without implementation.
In our own experience working with advisory firms to develop growth strategies, those who excel demonstrate three key
attributes: leadership, action and accountability.
In addition to focusing on implementation, firms are encouraged to explore their capabilities and their operating environment
to identify new opportunities that will lead to success. Financial
objectives are important but alone are inadequate. Instead look
to the leading indicators of business success to drive change and
performance. For more guidance on how this can be achieved,
firms are encouraged to contact FA Insight directly.
Our fourth and final article in the 2014 “Growth by Design”
series will focus on how to better realize growth potential
through marketing and business development. For many
advisory firms, marketing is the most underdeveloped of all
business capabilities. FA Insight will share study highlights
including the marketing practices that distinguish the industry’s Standout firms from their peers.
Dan Inveen oversees FA Insight’s research services. Eliza De Pardo
oversees FA Insight’s consulting services. They can be reached at
dan@FAInsight.com and eliza@FAInsight.com respectively.
TO ORDER THE 2014 FA INSIGHT STUDY OF
ADVISORY FIRMS: GROWTH BY DESIGN
For more comprehensive guidance, including financial and
operating performance benchmarking data, the complete
Growth by Design study is available for order through FA
Insight. Investment Advisor readers can purchase a specially
priced copy of the study by visiting www.fainsight.com,
clicking on “Order,” and then entering the discount code
IAREADER when prompted to receive a 30% discount off
the $250 price of the study.
Source: The 2014 FA Insight Study of Advisory Firms: Growth by Design.
FIgure 4: BusIness DevelOpment mOst expecteD tO ImpAct
New client business development
Operational efficiency gains
Additional business from existing clients
Clearer strategic focus
Improved capabilities or expertise
Improved client experience
Merger or acquisition
Additional products or services
Factors Expected to Have Major
Impact on Future Growth
PERCENTAgE Of fIRMs REsPONDINg