The Common Elements of Successful Advisory Firms

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I’ve coached many advisors over the years and spoken to thousands of others. Here’s what I’ve learned. My observations are anecdotal and not the result of a scientific study.

“Success” is elusive

Initially, it’s important to define what’s meant by “successful.” Most advisors seem to have AUM in the $50 million-$250 million range. If that generates enough income to support your business and give you the quality of life you seek, then you should be considered “successful.”

For this article, I’m going to define “successful” arbitrarily to include only firms with over $500 million AUM.

How did they do it?

Here’s what I’ve observed.

They have a niche

In my experience, successful advisors (as I have defined that term) most often have a niche. They don’t try to appeal to everyone. They aren’t concerned about alienating potential clients who aren’t in their target demographic.

Often, they have multiple niches, which may seem counterintuitive. For example, an advisory firm that focuses on health care professionals may also serve technology executives, even though there’s no connection between those demographics.

Sometimes, the additional niches come about organically. If their core niche is technology executives, those clients may refer non-technology executives, permitting the advisory firm to develop an additional expertise.