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New Tiburon Research Report - Financial Advisor Benchmarking & Best Practices

Tiburon Strategic Advisors, a market research & strategy consulting firm serving a wide variety of financial institutions and investment managers, is pleased to announce the release of its newly updated research report on Financial Advisor Benchmarking & Best Practices. This research release summarizes some of the report's key findings.

Please click the image above to view the table of contents for Tiburon's newly updated Financial Advisor Benchmarking & Best Practices Research Report

The purpose of this report is to provide readers with an initial understanding of benchmarking data, profiles, & best practices of leading financial advisors across a wide variety of traditionally defined channels. Dozens of studies exist regarding financial advisor benchmarking data (including Tiburon's own thirteen financial advisor benchmarking tools). Dozens of coaches claim to know the best practices of running a financial advisory business. This report compares and makes sense of dozens of existing benchmarking studies, addressing data ranging from profit margins to employee efficiency. The report also includes detailed profiles of over 700 leading financial advisory firms (a wholesaler's bible), seeking to identify best practices in critical activities such as marketing, human resources, culture, technology use, and succession planning. This is the second draft of Tiburon’s research on this topic, with each draft subsequently getting more thorough.

Tiburon’s first draft of this report was written in 2005; that version focused primarily on developing an organized structure for reviewing financial advisor benchmarking & best practices, and establishing profiles on hundreds of financial advisors across a dozen categories, including wirehouse, regional, & boutique broker/dealer brokers, independent reps, fee-only financial advisors, and CPAs & other tax professionals.

This is the second draft of this report; it focuses on coordinating it with findings from Tiburon’s Financial Advisor Mergers & Acquisitions research report, adding forty new financial advisors, and adding a common structure for each financial advisor’s profile.

Key Findings
This report has a long list of interesting facts to share:

Building a Great Business Through Benchmarking
This section provides key benchmarking highlights, including overall profitability, client profitability, partner productivity, employee productivity, economic profitability measures, and growth rates:

  • Examining the best practices of industry leading financial advisors will help to create awareness and promote practice management which is essential to success – industry leaders know the latest trends, which is what makes them the industry leaders
  • Three-quarters of brokers oversee less than $50 million assets under administration
  • Over half of independent reps earn less than $500,000 in revenues annually
  • More than half of all independent reps earn between $75,000 and $150,000 in pre-tax profits
  • Three-quarters of fee-only financial advisors manage less than $50 million in assets
  • Nearly two-thirds of expenses for fee-only financial advisors are devoted to principal & staff compensation
  • Increase in compliance and insurance-related costs is another factor affecting the bottom line for fee-only financial advisors
  • The average tax professional serves 118 financial planning clients, with the largest firms serving more than five times the average
  • The average rep firm advises on $23 million assets per partner; larger firms handle more than three times the average
  • The average fee-only financial advisor serves eighteen clients per employee
  • The average rep firm has grown its pre-tax profits by 15% per year; the larger firms are able to grow profits the fastest
  • Fee-only financial advisors serve fewer clients per employee than other advisors, even though they serve more per partner
  • The average independent rep firm serves 169 clients per partner
  • According to Tiburon’s data, the average independent rep firm earns $148,000 pre-tax profits per partner
  • While many advisors have over 500 clients per partner, Tiburon tools and other experts suggest lower ideal averages per partner

Building a Great Business Through Financial Advisor Firm Profiles
This section details key statistics of best practices profiles, including wirehouses, regional & boutique broker/dealers, independent reps, fee-only financial advisors, bank brokers, private bankers, CPAs & other tax professionals, estate attorneys & other lawyers, life insurance agents, third-party administrators, property & casualty insurance agents, real estate agents, and family offices:

  • The Glassman Team has $1.2 billion assets under administration, up over $300 million since 2003
  • Bingham, Osborn, & Scarborough’s revenues are over $7.5 million, up almost 100% since 2000
  • Don Irwin’s team has a median client net worth of $30 million
  • Keats Connelly has just over $150 million in assets under management
  • Clark Consulting’s Bank Consultants of America has 80 bank clients
  • Cameron Harris receives $27 million revenues while employing 200 people
  • Johnson Financial Group’s Johnson Asset Management has $1.2 billion assets under management
  • Fisher Investments’ Private Client Group generates about 8,000 leads per month, sets up 2,400 appointments (1,750 of which are held), and closes 375 new clients
  • Approximately $2.5 billion in assets have been captured by Hanson McClain Retirement Network advisors working with retirees of various telephone companies
  • Hanson McClain’s Hanson McClain Retirement Planning clients are slightly more than half Pacific Bell Retirees

Financial Advisor Best Practices
This section draws key conclusions regarding benchmarking and best practices profiles of the financial advisor industry:

  • Strategy & execution define success
  • Five key best practices across financial advisor markets include determine clear target markets, chose product & service offers to support the chosen target markets, develop appropriate marketing methodologies, build the necessary support infrastructure, and define business goals & develop written plans
  • Fee-based financial advisors & independent reps to grow fastest

To better understand the developments in Financial Advisors, executives can purchase Tiburon's Financial Advisor Benchmarking & Best Practices research report where the key findings highlighted above are covered in greater detail. Please contact Sarah Sage at SSage@TiburonAdvisors.Com or 415-789-2540.

More Information

The following links will open specific pages on Tiburon's web site:

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Tiburon Strategic Advisors

Tiburon Strategic Advisors, based in Tiburon, CA, was formed in 1998 to offer market research & strategy consulting services to all types of financial institutions and investment managers:

  • The firm has served over 300 corporate clients and completed over 1,100 projects since its founding, and today, its knowledge base includes mutual fund distribution, separately managed account programs, alternative investments, wealth management, insurance products, banking services, the fee-only financial advisor market, the CPA firm market, the family office market, and various international markets.
  • Tiburon holds a series of CEO Summits semi-annually for its executive-level clients. The next CEO Summit is scheduled for October 14-15, 2008 (San Francisco, CA) at the Ritz Carlton Hotel in San Francisco, CA. 2009 dates are April 9-10, 2009 (New York, NY), and October 7-8, 2009 (San Francisco, CA). Attendance is by invitation only and attendance at each Summit is limited to 125 senior industry executives. Visit the CEO Summits section of Tiburon's web site for details on current and past CEO Summits, including attendee lists, meeting agendas, and highlights. Please contact Tiburon's Managing Principal Chip Roame at CRoame@TiburonAdvisors.Com or (415) 789-2541 if you are a Tiburon client and have an interest in attending a future Tiburon CEO Summit.
  • Tiburon has published forty-one ~300-400+ page research reports, which offer detailed analyses of growing business segments; each is available for $5,000; these reports can be ordered by contacting Sarah Sage at SSage@TiburonAdvisors.Com or (415) 789-2540.
  • Tiburon offers an annual research report retainer service, whereby dozens of clients receive all Tiburon reports published within a year for $25,000; clients can subscribe to Tiburon's 2008 Research Report Retainer by contacting Sarah Sage at SSage@TiburonAdvisors.Com or (415) 789-2540.
  • Tiburon also offers a database access program, whereby it shares its 300,000+ person industry executives contacts database with dozens of clients for $25,000 per year (distributed quarterly); clients can subscribe to Tiburon's Database Access Program by contacting Sarah Sage at SSage@TiburonAdvisors.Com or (415) 789-2540.
  • Tiburon offers thirteen online business benchmarking tools that are available to all types of financial advisors in an effort to help them benchmark their business practices and build more successful businesses. The sites include www.BrokerBestPractice.Com for wirehouse & regional brokers, www.FABestPractices.Com for fee-only financial advisors, www.IndependentRepBestPractices.Com for independent reps, and www.PrivateBankerBestPractices.Com for private bankers. Almost 5,000 advisors have used these tools. By completing one of the online surveys, financial advisors can access a FREE copy of the relevant comprehensive Tiburon research report, which summarizes and analyzes the collective results.
  • Tiburon's weekly research releases, like this one, are emailed for free to interested industry executives, media representatives, conference planners, and individual financial advisors. Over 55,000 industry executives now receive these releases. Feel free to sign up to receive future research releases at Tiburon's web site (www.TiburonAdvisors.Com) if this release was passed to you by a colleague and you would like to receive them directly in the future.
  • Tiburon plans to expand its workforce in 2008-2009. Specifically, the firm plans to add two-to-three incremental principals (the most senior role at the firm) and several more research managers in 2008-2009.
  • Tiburon has built three executive programs (CEOs-in-Residence, Financial Advisor Roundtable, and Consulting Fellows) in an effort to bring the experiences of additional senior level industry executives to Tiburon clients. Feel free to contact any of the members of Tiburon’s executive programs directly or ask that they be included in any ongoing Tiburon project.

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