LOS ANGELES, March 16, 2021 — What does a successful advisory practice look like today? PracticeLab, Capital Group’s new digital destination for financial professionals, with insights and actionable ideas to help build advisory businesses and serve clients, will help answer that question.
The new practice management platform gives financial professionals access to regular webinars with Capital Group specialists, including practice management consultants and wealth strategists, as well as articles, podcasts, and other resources and tools. These cover a wide range of topics, from how best to market your advisory business and client acquisition strategies to tax and estate planning and how to navigate challenging client conversations, such as the recent “how to talk politics with clients.”
The platform content reflects insights from Capital Group’s first comprehensive study benchmarking the practices of over 1,500 financial professionals across the U.S. The study found that practice management choices are often the driving force behind outsized growth of advisory firms.
“We found a compelling and actionable insight,” said Mike Van Wyk, vice president, customer research and insights, Capital Group, home of American Funds. “The average financial professional spent nearly half their time on client management activities, but if they could shift even 1% of that time to activities such as team management, strategic marketing or prospecting, our study showed this boosted their firm's AUM by 3%.”
PracticeLab is designed to help financial professionals focus on higher-value activities they deem important.
“Financial professionals are business owners as well as experts when it comes to understanding their clients’ financial needs and goals,” said Riley Etheridge, president, wealth management client group, Capital Group. “Our benchmark study reinforces that each firm has its own unique pathway to growth. PracticeLab meets advisors where they are and provides them with resources to help them manage and scale their business.”
The benchmarking study also found that deploying sound acquisition strategies, creating “relationship alpha” and achieving strategic scale are crucial to the health and future growth of an advisor’s practice. Van Wyk added, “Our research shows there isn’t a one-size-fits-all way to grow one’s advisory business, yet practices do consistently have better growth outcomes when they are intentional about practice management.”
Additional findings from the Advisor Benchmarking study, available on PracticeLab, include:
- High-growth practices are 25% more likely to implement client acquisition goals.
- 71% of high-growth practices have built-in procedures for client onboarding versus just 57% of low-growth practices.
- High-growth financial professionals are 50% more likely to say they are experts in marketing or building a digital presence, and are more likely to use direct mail, email or text messaging as a new client channel.
- The fastest-growing advisory firms in the study are more likely to offer services such as generational wealth transfer education, tax and estate planning, and charitable giving. These same firms have a higher ratio of clients gained to lost compared to others in the survey.
- Practices whose book of business contains 50% or more high net worth clients are not growing any faster than the average practice, but those firms that optimize their relationship with other high net worth clients (i.e., multi-generational relationships) tend to see higher growth.
- Financial professionals with a higher percentage of institutional assets under management from retirement plan consulting are twice as likely to be growing their business.
- Financial professionals in the highest growth segments spend 14% less time preparing for client meetings, 10% less time monitoring the market, and are 13% more likely to use models than lower-growth practices − all while being 38% more likely to have an expert-level skill in practice productivity.
- Financial professionals in the highest-growth segments use tools such as portfolio management software, trading/rebalancing software, and CRM and document management software.
- Higher-growth segments of financial professionals spend more time on team management and less on client book management.
This new practice management hub, including regular webinar and podcast series and additional findings of the Advisor Benchmarking Study, can be accessed at practicelab.com.
About Capital Group
Celebrating its 90th anniversary in 2021, Capital Group, home of American Funds, has been singularly focused on delivering superior results for long-term investors using high-conviction portfolios, rigorous research and individual accountability. As of December 31, 2020, Capital Group manages more than $2.3 trillion in equity and fixed income assets for millions of individual and institutional investors around the world.
Capital Group manages equity assets through three investment groups. These groups make investment and proxy voting decisions independently. Fixed income investment professionals provide fixed income research and investment management across the Capital organization; however, for securities with equity characteristics, they act solely on behalf of one of the three equity investment groups.
For more information, visit www.capitalgroup.com.