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Pathways to Growth

Capital Group’s Advisor Benchmark Study

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Three crucial routes to business growth

In Capital Group's Pathways to Growth: 2023 Advisor Benchmark Study, we surveyed more than 1,500 advisors to answer the question: Why did some practices grow 144% more than others? Our research identified certain actions and practice management behaviors that helped drive growth across the board, for all kinds of practices.

We categorized these higher-impact activities within three distinct groupings, or pathways. Understanding what these paths are and how they relate to each other can help you rebalance your time and energy toward growth-related behaviors.

Find out more about each of these pathways below. Then find actionable ideas to help you stand out among the highest growth advisors in our Pathways to Growth article collections.

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Client Acquisition

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 87% of its new clients and engages in limited marketing activity. While new and existing clients are both important sources of growth, our latest survey found the average advisor was slightly more focused on existing clients as a primary growth driver.

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Client acquisition

Relationship Alpha

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 education planning, to charitable planning, to family education and generational wealth transfer — grew faster than those that did not. One key offering correlated to high growth was retirement plans, as practices with at least 25% of AUM in defined contribution plans 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 is offered by 93% of total advisors and 96% of the highest growth advisors. Investment management is offered by 95% of total advisors and 92% of the highest growth advisors. Financial planning is offered by 88% of total advisors and 91% of the highest growth advisors. These services are labeled "table stakes" for almost all advisors. Life insurance is offered by 73% of total advisors and 85% of the highest growth advisors. Annuity products are offered by 76% of total advisors and 82% of the highest growth advisors. Educational planning is offered by 60% of total advisors and 65% of the highest growth advisors. Family education and generational wealth transfer is offered by 54% of total advisors and 62% of the highest growth advisors. Estate planning is offered by 57% of advisors and 60% of the highest growth advisors. Tax planning and strategy is offered by 53% of total advisors and 56% of the highest growth advisors. Charitable planning is offered by 47% of total advisors and 52% of the highest growth advisors. Banking services are offered by 31% of total advisors and 31% of the highest-growth advisors. The source is Capital Group.

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Relationship Alpha

Strategic Scale

Building a business takes thinking like a CEO, 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 has led to higher growth. Seeking areas of efficiency – through technology, model portfolios, processes, productivity tools and team building — and focusing on the highest value activities has led 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. 62% of total advisors and 64% of the highest growth advisors have goals for assets under management or AUM. 55% of total advisors and 59% of the highest growth advisors have goals for revenue. 50% of total advisors and 58% of highest growth advisors have goals for client retention. 45% of total advisors and 55% of the highest growth advisors have goals for percent of growth in AUM. 42% of total advisors and 49% of the highest growth advisors have goals for client acquisition. 39% of total advisors and 36% of highest growth advisors have goals for client satisfaction. 36% of total advisors and 44% of the highest growth advisors have goals for revenue growth. 20% of total advisors and 29% of the highest growth advisors have goals for productivity. 14% of total advisors and 17% of the highest growth advisors have goals for efficiency. 10% of total advisors and 13% of the highest growth advisors had goals for return on marketing investment. 3% of total advisors and 7% of the highest growth advisors had goals for return on technology investment. Percent growth in AUM, client acquisition, revenue growth, productivity, efficiency, and marketing and technology ROI are highlighted as areas where highest growth advisors were more intentional about setting goals in most areas. Client satisfaction is not highlighted. 11% of total advisors and 4% 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, May and June 2023

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Strategic Scale

Get your copy of our latest Pathways to Growth study for greater insights, including:

- Client acquisition strategies

- Enhanced service offerings

- Strategies to help you scale

- Marketing tactics that set high-growth practices apart

- 5 steps on your pathway to growth

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Explore our curated collections of related PracticeLab articles:

Client acquisition

Relationship Alpha

Strategic Scale

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