Philip Palaveev

More growth in our industry means having some accountability .

ARLIER THIS YEAR , WE LAUNCHED OUR INAUGURAL “ TRUE

Ensemble Data Insights ” study .* We are still analyzing the wealth of data received , but in our initial looks we uncovered an interesting — and perhaps concerning — growth trend .

In 2023 , the independent advisory firms participating in our study grew their assets under management ( AUM ) by 20.3 %, but their number of client relationships grew by only 8.3 %. This year , firms are hoping to keep the momentum and target another year of near 20 % growth , but it seems that we are placing our hopes with the market rather than our ability to add new relationships and more assets from existing relationships .

They say that success has many parents and failure is an orphan . This is certainly true with growth . We struggle with it , and we are disappointed by it , but no one wants to be responsible for the outcome or the change .

No Personal Accountability To begin with , close to 58 % of advisory firms do not articulate individual growth targets for their advisors . Instead , they set a firm-level goal that will somehow be accomplished by their collection of people . When I ask the question in my meetings : “ Who is responsible for growth ?” the answer I usually hear is , “ Everyone !” which makes me very , very worried . Author and literary critic G . K . Chesterton once said : “ I searched all the parks in the city — there are no statues of committees .”

Most advisory firms fear setting growth targets on individuals . This would mean , for example , asking a lead advisor to bring in 10 new clients in 2024 or alternatively bring in $ 10 million in AUM . Firms are reluctant to do that whether that target is expressed in assets , clients or revenues for fear that such a target will damage the culture and the relationship with the person .

16 | FINANCIAL ADVISOR MAGAZINE | JULY / AUGUST 2024 WWW . FA-MAG . COM