Practical analysis for investment professionals
08 February 2012

Five Success Factors for High-Growth Financial Advisers

Do you have what it takes to be a successful financial adviser?

To find the answer, the folks at MarketPsych surveyed a group of advisers. MarketPsych is a behavioral finance training firm dedicated to helping financial advisers strengthen client relationships, gather assets, and grow their businesses. Their goal with this survey was to identify the traits that led to practice growth during and after the recent financial crisis. Not surprisingly, they found there was a strong correlation between a focus on client relationships and business growth. In other words, the advisers who experienced the highest growth in the past three years were the ones who cultivated client relationships and let the markets take care of themselves.

In their white paper, “Wealth Management or Investment Advising,” the authors noted that the differences between wealth management and investment management “speak to a subtle but important difference in the financial professional’s approach.” A wealth manager, they explained, “is focused on managing client assets, whereas an investment manager is focused on the specific investment decisions.” The former is a “deeper and more holistic” focus and is associated with greater success.

The authors also found that successful professionals appear to take a longer-term and more collaborative approach to their work. “Success is associated with less of a focus on short-term decisions (‘timely investment management’), than on longer-term decisions (‘financial planning’),” the authors write. “A focus on helping the client make the decisions (rather than making them for the client) appears to be a major point of differentiation.”

So what are the key takeaways? Here, briefly, are the five success factors:

  1. High-growth financial advisers focus more on clients and less on returns.  (For ideas on how to manage clients using communication tactics, see MarketPsych’s article on strategic emotional communication in the Private Wealth Mangement newsletter or tune in to a webinar with Richard L. Peterson, a managing partner of MarketPsych.)
  2. High-growth financial advisers have larger and less exclusive sales funnels.
  3. High-growth financial advisers send more personal communications and articles. They also ask about values and legacy.
  4. High-growth financial advisers focus on building relationships and understanding their clients’ values.
  5. High-growth financial advisers see themselves as wealth managers and offer financial planning and holistic services.

Are you and your practice primed for success?

About the Author(s)
Lauren Foster

Lauren Foster was a content director on the professional learning team at CFA Institute and host of the Take 15 Podcast. She is the former managing editor of Enterprising Investor and co-lead of CFA Institute’s Women in Investment Management initiative. Lauren spent nearly a decade on staff at the Financial Times as a reporter and editor based in the New York bureau, followed by freelance writing for Barron’s and the FT. Lauren holds a BA in political science from the University of Cape Town, and an MS in journalism from Columbia University.

3 thoughts on “Five Success Factors for High-Growth Financial Advisers”

  1. Great post, Lauren. So great to see CFA Institute providing valuable insights for wealth management industry!

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