Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.Dan Richards

Regardless of market conditions or the business environment, some advisors inevitably expand their business at the expense of their peers.

How exactly do those advisors do it?

Late last year, a report released by software-provider PriceMetrix identified three common traits among advisors who were able to show sustained growth in their practices.

How the research was done

PriceMetrix is a Toronto-based firm specializing in the investment industry.  They work with a cross section of mid-size and large U.S. and Canadian full-service brokerage firms, and have access to data on 15,000 advisors, three million investors and over $900 billion in assets.

PriceMetrix looked at the 12 months to June 2011, analyzing advisors with similar styles of business (primarily transactional, fee-based or managed) and similar tenure in the industry.  Looking at growth in assets and revenue, they called advisors in the top quartile of growth in their category “outperformers,” and compared their performance to the advisors in the bottom quartile in that same category.  To keep the data consistent, they excluded smaller producers and advisors with less than three years of industry experience. 

Quantifying outperformance

In June 2010, when the study began, the outperforming and bottom-performing groups advisors both averaged assets of about $85 million.  Twelve months later, the outperformers’ average assets were $15 million higher than the comparison group.

And while both groups averaged 200 households, the outperformers had significantly better growth in assets, revenue and return on assets:

June 2011 (change in last 12 months)    


Comparison Group

Average assets ($millions)                         





Average assets per household                 





Average household revenue                     





Average return on assets                            






As for revenue, in the 12 months to June 2010 leading up to the study, the comparison group’s revenue averaged $633,000 versus $581,000 for the outperformers.

During the next 12 months, the numbers reversed, with the outperformers’ revenue up 34% to $782,000versus a decline for the comparison group to $606,000.

PriceMetrix observed three widespread patterns among advisors who outperformed:

  1. Replacing smaller accounts
  2. Transitioning to fee-based and discretionary businesses
  3. Using disciplined pricing across their practices

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