What Drives Growth for Financial Advisors? Evidence from a Multi-Year Survey

31 Pages Posted: 2 May 2023 Last revised: 11 Oct 2023

See all articles by Wei Dai

Wei Dai

Dimensional Fund Advisors

Marco Di Maggio

Harvard Business School; National Bureau of Economic Research (NBER)

Kaitlin Hendrix

Dimensional Fund Advisors

Wiebke Lamping

Dimensional Fund Advisors

Savina Rizova

Dimensional Fund Advisors

Trey Roberts

Dimensional Fund Advisors

Date Written: April 17, 2023

Abstract

This paper uses one of the largest surveys of financial advisors to shed light on the key drivers of advisory firm growth. Firms offering a larger variety of services, such as education planning and account aggregation, experience a significantly higher growth in assets under management (AUM), revenue, and clients. Firms that source new clients from multiple sources and meet with more prospects also grow more. The strongest detractors from growth appear to be the rising average age of the client base and the lack of a succession plan or exit strategy.

Keywords: Fees, practice management, investment models, financial advisors

JEL Classification: G20, D22, L20, L84

Suggested Citation

Dai, Wei and Di Maggio, Marco and Hendrix, Kaitlin and Lamping, Wiebke and Rizova, Savina and Roberts, Trey, What Drives Growth for Financial Advisors? Evidence from a Multi-Year Survey (April 17, 2023). Available at SSRN: https://ssrn.com/abstract=4421177 or http://dx.doi.org/10.2139/ssrn.4421177

Wei Dai

Dimensional Fund Advisors ( email )

6300 Bee Cave Road, Building One
Austin, TX 78746
United States

Marco Di Maggio

Harvard Business School ( email )

Soldiers Field
Baker Library 265
Boston, MA 02163
United States

HOME PAGE: http://https://www.hbs.edu/faculty/Pages/profile.aspx?facId=697248

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Kaitlin Hendrix

Dimensional Fund Advisors ( email )

6300 Bee Cave Road, Building One
Austin, TX 78746
United States

Wiebke Lamping (Contact Author)

Dimensional Fund Advisors ( email )

6300 Bee Cave Road, Building One
Austin, TX 78746
United States

Savina Rizova

Dimensional Fund Advisors ( email )

6300 Bee Cave Road, Building One
Austin, TX 78746
United States

Trey Roberts

Dimensional Fund Advisors

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