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RETIREMENT PLAN INVESTOR

Use your plan ID (available on your account statement) to determine which employer-sponsored retirement plan website to use:

IF YOUR PLAN ID BEGINS WITH IRK, BRK, 1 OR 2

Visit americanfunds.com/retire

IF YOUR PLAN ID BEGINS WITH 34 OR 135

Visit myretirement.americanfunds.com

Pathways to Growth:

Capital Group’s 2021 Advisor Benchmark Study

Research reveals three growth factors

In Capital Group's inaugural Pathways to Growth: 2021 Advisor Benchmark Study, we surveyed more than 1,500 advisors in search of answers to a crucial question: Why do some practices grow over 60% faster than others? Our research identified certain actions and behaviors that helped drive growth for all types of practices. 

These higher-impact activities fall into the three categories below.

Enhance your practice with actionable ideas found in our Pathways to Growth article collections.

  

Successful practices make client acquisition a focus and have established procedures for marketing, acquisition and client onboarding.

An intentional approach

Clients are the lifeblood of every practice and key drivers of assets under management (AUM) and revenue growth. Our study showed that practices that made client acquisition a focus and utilized marketing-based strategies gained a greater-than-average share of new clients and achieved higher-than-average growth. Yet, the average practice relies on referrals for over 80% of its new clients and engages in limited marketing activity. And despite minimal acquisition-oriented marketing activity, respondents expected new clients to be a primary growth driver.

  

Delivering products and services that support clients in reaching a range of life goals builds confidence, loyalty and deeper engagement.

More offerings delivered in a differentiated way

Certain products and services are “table stakes” offerings for all practices. But our study confirmed that practices offering a broader range of services tied to the long-term goals of clients and their families — from tax planning, to charitable giving, to serving multiple family generations — grew faster than those that did not. One key offering correlated to high-growth was retirement plans, as practices with significantly higher-than-average shares of their AUM in them grew faster.

Products and services offered directly through practice

Chart compares the percentage of total advisors surveyed to the highest-growth advisors offering various types of products and services. Retirement planning/income is offered by 94% of total advisors and 99% of the highest-growth advisors. Investment management is offered by 94% of total advisors and 94% of the highest-growth advisors. Financial planning is offered by 89% of total advisors and 96% of the highest-growth advisors. These services are labeled "table stakes" for almost all advisors. Annuity products are offered by 79% of total advisors and 87% of the highest-growth advisors. Life insurance is offered by 76% of total advisors and 80% of the highest growth advisors. Educational planning is offered by 63% of total advisors and 69% of the highest-growth advisors. Estate planning is offered by 58% of advisors and 73% of the highest-growth advisors. Generational wealth transfer is offered by 55% of total advisors and 68% of the highest growth advisors. Tax planning and strategy is offered by 51% of total advisors and 54% of the highest-growth advisors. Charitable planning is offered by 44% of total advisors and 53% of the highest-growth advisors. These four segments are labeled as value-added services more likely to be offered by the highest-growth advisors. Finally, banking services are offered by 32% of total advisors and 30% of the highest-growth advisors. The source is Capital Group.
  

Building a business takes thinking like one, which means spending more time on the activities correlated to growth.

Spending time smartly

While it may come as no surprise that advisors are dedicating 80% of their time to client and investment management, our findings indicate that allocating more time to practice management leads to higher growth. Seeking areas of efficiency – through technology, model portfolios, processes, productivity tools and team building — and focusing on the highest-value activities leads to higher-growth practices. 

Share of advisors who set defined and measurable goals in the following areas

Chart compares the percentage of total advisors to highest growth advisors with defined and measurable goals in various areas. 67% of total advisors and 66% of the highest-growth advisors have goals for assets under management or AUM. 57% of total advisors and 53% of the highest-growth advisors have goals for revenue. 55% of total advisors and 59% of highest-growth advisors have goals for client retention. 51% of total advisors and 56% of the highest-growth advisors have goals for percent growth in AUM. 43% of total advisors and 57% of the highest-growth advisors have goals for client acquisition. 43% of total advisors and 48% of the highest-growth advisors have goals for client satisfaction. 42% of total advisors and 48% of the highest-growth advisors have goals for revenue growth. 22% of total advisors and 26% of the highest-growth advisors have goals for productivity. 15% of total advisors and 21% of the highest-growth advisors have goals for efficiency. 10% of total advisors and 12% of the highest-growth advisors had measurable goals for marketing return on investment. 3% of total advisors and 8% of the highest-growth advisors had goals for technology return on investment. Percent growth in AUM, client acquisition, client satisfaction, revenue growth, productivity, efficiency, marketing and technology ROI are highlighted as areas where higher-growth practices are more focused on efficient and productive business practices. 9% of total advisors and 7% of the highest-growth advisors replied "none of the above." The source is Capital Group.

Source for all chart data:Capital Group Advisor Benchmark Survey, July and August 2020

Download our Pathways to Growth: 2021 Advisor Benchmark Study for more insights, including:

  • Client acquisition behaviors associated with high-growth practices. 
  • How high-growth practices differentiate their service offerings. 
  • Technologies and products high-growth practices use to build scale.
  • Strategies for avoiding the mid-career slump.
  • Five steps on your pathway to growth.

Explore our curated collections of related PracticeLab articles:

   

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