During panels at Wealth Management EDGE, RIA heads and consultants pointed to the importance of deliberate strategies to promote organic growth.
“Organic growth is one of our core values,” said James Bogart, president of Bogart Wealth, speaking at EDGE at The Boca Raton resort in Boca Raton, Fla., this week. “We’ve added it to every part of our business.”
Bogart said part of business development has been an “organic growth engine” that includes working with Fortune 500 companies to build touchpoints with employees.
Shannon Spotswood, CEO of RFG Advisory, said the average advisor spends just 1.2% of revenue on growth. That, combined with an aging workforce, explains the low organic growth rates among most RIAs.
Spotswood said advisors need to examine their time usage and “outsource” non-revenue-generating activities.
“This is a lightning strike moment for advisors,” she said. “Advisors are going to have to look in the mirror and ask ‘what is the highest and best use of my time?’ …. this is all about misaligned priorities.”
She cited a study that found that if 10 hours a week are allocated to working with clients and prospecting and three hours a week are spent leveraging AI, then a $1 million producing advisor can generate $541,000 additional revenue annually.
Bogart agreed, saying that if advisors can understand the value of their time, it can be “the biggest unlock for organic growth.”
The moderator of the session, Joe Anthony, co-founder and president of Gregory CFA, noted that less than 1% of $1 billion RIAs have an operational head focused on business development and organic growth.
“At every conference, there is a panel on organic growth, but it’s amazing how little uptake there has been,” he said.
Nate Biddick, head of advisor growth solutions, Cetera Financial Group, said the broker/dealer offers advisors a roadmap for growth.
He said firms that implement one of the strategies on the roadmap see a 72% growth rate in gross revenue, and those that adopt two of the strategies see a 172% growth rate.
“Intentionality is key,” Biddick said.
In a separate panel on how advisors can break through a $1 billion AUM goal, Stephanie Bogan, founder and chief possibility officer at Limited Advisor Coaching, said most RIAs are created with people who work hard and do well, but don’t have time to “build a process.”
“I know you have really big ideas that you want to implement, but you are stuck in the grind,” she said. “You have built to a level of success where you actually have problems such as staffing, vision, having the right talent.”
Megan Carpenter, CEO and co-founder of RIA marketing firm FiComm Partners, said RIAs need to focus on strategic planning to solve these problems and stay on a growth path.
“As you get bigger, growth actually becomes harder,” Carpenter said. “It’s important to ask, ‘What is my marketing strategy so I can grow and get stronger?’”
Carpenter also warned against firms relying on “rainmakers” to bring in new clients without a plan for others to contribute.
“How can you distribute accountability for marketing-enabled growth through the organization?” she asked the advisor audience.
Biddick noted the huge demand for financial advice in the U.S. from the wave of retirees entering the market.
“It’s our moral imperative to get ourselves together to allocate the right amount of time to business development,” he said.
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