DENVER (May 9, 2023) – Financial advisers face significant challenges in growing their businesses, according to recent research by the Financial Planning Association® (FPA®) and Janus Henderson. The research found that while 46% of financial advisers say they are comfortable with their current growth rate, a mere 12% strongly agree with that sentiment.
The research, conducted in October 2022, gathered data on strategy, planning, execution, and intangibles, including circumstantial or psychological influences on adviser growth. The result of the research is Six Keys to Growth for Today’s Adviser. This new whitepaper outlines six critical factors for today’s advisers looking to grow their businesses, including:
- The anatomy of a business plan matters.
- Advisers know what they need to do to drive growth but don’t always act on that knowledge.
- Firms with teams grow faster than those without.
- Systems and processes form a strong foundation for growth.
- It’s not enough to define your ideal client; you need to actively engage them.
- Mindset can be a powerful influence on growth prospects.
“New business development remains a perennial challenge for many financial advisors,” said Matt Sommer, Head of Specialist Consulting Group at Janus Henderson Investors. “By examining the gaps between what advisers believe is critical to driving growth and what they have acted on, as well as the common traits among firms growing at an accelerated pace, our research with the Financial Planning Association provides all firms with actionable insights that can help put their business goals within reach.”
The research revealed several psychological factors that hinder adviser growth and highlights the importance of overcoming these impediments to achieve sustainable business growth. Financial advisers must proactively address their fears and concerns related to sales efforts and consider building a strong team to support growth objectives. Additionally, designing a client experience based on the unique needs of their ideal clients can be a key differentiator in today's competitive financial advisory landscape.
Among the psychological factors identified in the research that impede growth is the fear of appearing pushy or 'salesy.' A significant 43% of financial advisers expressed worry about being perceived as pushy or overly sales-oriented when trying to grow their businesses. This fear often prevents them from proactively expanding their client base and increasing their assets under management.
Furthermore, the research found that firms with teams tend to grow faster than those without teams. An overwhelming 84% of top advisers—those with assets under management exceeding $500 million—strongly agreed that having a team contributes to the growth of their business. This suggests that collaborative efforts and leveraging a team's strengths can be crucial role in achieving sustainable growth.
The research also revealed that firms that onboarded ten or more clients in the previous 12 months are more likely to have gone beyond simply identifying their ideal clients. They intentionally design an experience based on their ideal clients’ specific needs, challenges, and preferences. This tailored approach to client engagement allows advisers to provide a personalized experience, which can lead to increased client satisfaction and loyalty.
“As the research suggests, if advisers can shift their mindset and intentionally approach their goals for business growth strategically, they can overcome barriers that may be holding them back,” says 2023 FPA President James Lee, CFP®, CRPC®, AIF®. “We were honored to work with our partners at Janus Henderson to shed important light on those barriers that may be impeding FPA Members—and all financial advisers–from taking the next step in their business growth goals.”
About the Research:
The research, conducted by FPA and Janus Henderson, surveyed 158 financial advisers from Sept. 26 to Oct. 18, 2022, to gather insights on the challenges and factors influencing their business growth. The study aimed to identify the psychological and other factors hindering financial advisers' growth and provide actionable recommendations to overcome these barriers. The Six Keys to Growth for Today's Adviser whitepaper, which includes a deeper dive into the survey findings, is now accessible.
About the Financial Planning Association
The Financial Planning Association® (FPA®) is the principal membership organization for CERTIFIED FINANCIAL PLANNERTM professionals and those engaged in the financial planning process. FPA is the CFP® professional’s partner in planning by helping them realize their vision of professional fulfillment through practice support, learning, advocacy, and networking. Learn more about FPA at financialplanningassociation.org and on Twitter at twitter.com/fpassociation.
About Janus Henderson
Janus Henderson is a global asset manager with more than 340 investment professionals and expertise across all major asset classes. Our individual, intermediary and institutional clients span the globe and entrust us with more than US$287.3bn of their assets*. Our commitment to active management offers clients the opportunity to outperform passive strategies over the course of market cycles. Through times of both market calm and growing uncertainty, our managers apply their experience weighing risk versus reward potential – seeking to ensure clients are on the right side of change.
*Source: Janus Henderson Investors. Staff and AUM data as of 31 December 2022. AUM data excludes Exchange-Traded Note (‘ETN’) assets.