Findings from the 2021 Kehrer Bielan Top Directors Awards
Parsing the performance data from the investment services practices in 406 banks and credit unions to identify the 71 best performers provides a window into what makes an investment services firm great.1
One surprising insight is how well the smaller practices fared in the rankings. Those with less than seven financial advisors accounted for half of the top dozen in our rankings, 15 of the top 24, and 28 of the top 50 investment services practices.1
Many of our metrics, such as revenue, assets, and clients per financial advisor, or revenue or assets per client, are not dependent on the size of the business. Other metrics, such as total revenue and number of financial advisors, are scaled by comparing them to a measure of the size of the institution [core or share deposits], so we can evaluate those metrics on a pound-for-pound basis. This analysis revealed that some small practices are punching above their weight. How do they do it?
One key is that they were able to reduce the size of their advisors’ books, so that the advisors had the capacity to develop deeper relationships with their best clients, increasing revenue and assets per client.
|All 406 Investment Services Practices
|All 71 Awardees
|Top Ranked Practices with 25+ Advisors
|Top Ranked Practices with Less than 7 Advisors
|Clients per Advisor
|Revenue per Client
There wasn’t much difference between the 71 award winners and all the other 335 practices evaluated in the size of their advisors’ books, but the top-ranked small practices averaged only 294 clients per advisor, 28% fewer clients than advisors in the top-ranked larger business units.
The 71 award winners did generate more revenue per client than the universe of practices assessed. But that pales by comparison to the top ranked small business units, which averaged $3,496 per client, more than double the industry norm, and substantially higher than the other award winners.
This is another example of the power of a lean advisor book, and how a small investment services business that outsources its broker dealer functions can have outsized performance.
Dave Bresler, Vice President, CFP®, Advisor Business Development Group at Ameriprise, calls this the paradox of growth. “Our internal research is consistent with Kehrer Bielan’s in that adding more clients and AUM doesn’t necessarily lead to linear growth, in fact, it often is a drag on productivity. The key to exponential growth is getting your client to financial advisor ratio down into the 150-250 range. We’ve found that adding advisors or outsourcing low to middle tier clients to a remote advisor center works equally as well. The key is to focus on the client and member experience first and let the growth follow.”
To learn more about how Ameriprise Financial Institutions Group helps institutions build their investment program with meaningful financial planning and advice, qualified recruiting, strategic analysis and outstanding financial advisor support, please contact 800.679.1237 or go to ameriprise.com/AFIG.
1Kehrer Bielan Research & Consulting proprietary data 2021
The 2021 Kehrer Bielan Top Director Awards were presented by Ameriprise Financial Institutions Group.
Ameriprise Financial and Kehrer Bielan are not affiliated.
Securities offered by Ameriprise Financial Services, LLC. Member FINRA and SIPC.