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ACCELERATING EVOLUTIONRESULTS OF THE INVESTMENTNEWS 2014 FINANCIAL PERFORMANCE STUDY OF ADVISORY FIRMS
THE ENSEMBLE PRACTICESponsored by Pershing Adviser Solutions LLC
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Key Findings
• The advisory industry is prosperous and thriving
• The top firms in the industry are growing very aggressively and taking the top clients
• Much of the growth is fueled by contributions and market performance – firms need to emphasize new business development
• Productivity in the industry is very high but the largest firms are more than twice as productive as the smaller ones
• Many firms are underinvesting in human capital and harvesting profits at the expense of the future
• Everyone is a buyer – sellers wanted
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Asset Growth in the Last 5 Years
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Revenue and Income Growth by Size of the Firm
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The P&L Results
$500,000 $2,000,000 $5,000,000 $10,000,000
Revenue 100% 100% 100% 100%
Direct Expense
37% 36% 41% 37%
Overhead 39% 40% 36% 36%
Profit 27% 24% 23% 27%
EBOC $ $392,000 $1,129,000 $2,596,000 $5,991,000
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Sources of New Assetsby Firm Performance
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Revenue and AUM per Clientby Size of the Firm
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Revenue per Clientby Firm Performance
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How Firms Market Themselves
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Why Top Firms Have The Top Clients
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Astonishing Productivity
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Strategic Priorities
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Elusive Economies of ScaleOverhead Percentage by Size of the Firm
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Under Investing in Staff?
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Mergers and Acquisitionsby Size of the Firm
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