The number of COVID-19 cases continues to increase throughout the U.S., Europe, and Russia, and new concerns are emerging about how the virus is likely to impact countries and their economies in the coming months. Despite those concerns, continued growth remains a major trend for Registered Investment Advisors (RIAs) and the💝ir advisory firms. It's a trend that could even see an increase by the end of the year. 

In our recent webinar, we spoke with Lisa Salvi, vice president of Business Consulting♊ and Education for Schwab Advisor Services, to discuss the findings of the and highlight the factors underlying that growth.

The Importance of a Strategic Plan

Currently in its 14th year, the RIA Benchmarking Study is one of the leading studies in the industry and features findings from 1,010 advisory firms representing $1.1 trillion in AUM. 

Conducted between January and early April 2020, the study found that advisors started the year in a position of strengt🐻h following the longest bull market in recent history. Surprisingly, many firms continued to see ongoing growth even during the worst periods of volatility in March.

“Advisors are used to innovating... and I think that’s one of the things in this COVID world that...has helped to set them up for success,” explains Salvi, emphasizing that a keen focus on client experience has made a crucial difference during a period of extreme uncertainty. “We saw people pivot their busi🌌ness model very rapidly and serve their clients extraordinarily well through this time period.”ಞ

One of the biggest predictors of success for many firms has been a clear and actionable strategic plan. In fact, 75% of the top-performing firms in the study had these plans in place before the start of the pandemic and have been able to adapt to challenges more effectively as a result. According tꩲo Salvi, a comprehensive strategic plan should♕ include a long-term vision, SWOT analysis, a purpose, and a value proposition. She also emphasizes that firms of all sizes can benefit from having one.

Persona Targeting Can Yield Significant Results

Another important finding of the study is the impact of persona targeting. Of the firms surveyed, those with a documented ideal client persona attracted 28% more new clients and 45% more assets in 2019. 🍒Salvi explains that this is not a coincidence: “I am convinced that this is a huge differ⛄entiator for the firms that take it seriously.” 

To create those personas, firms need to take into ꦜaccount the demographic and psychographic characteristics of their ideal clients and understand what matters to those clients and wha♏t they value. For firms that are still in the early stages of growth, Salvi suggests that it’s okay to take on clients outside of those ideal personas, as long as there is some overlap with the key demographic they aim to serve.

The Bottom Line

A focused business model that focuses on ideal cl𒐪ient personas and a strategic plan can give your firm a clear sense of direction and a predictable growth trajectory. Best of all, it can help you navigate periods of volatility and still come out on top.