|By Business Wire||
|February 10, 2014 09:05 AM EST||
Fidelity Institutional Wealth Services®1, a leading custodian for registered investment advisor (RIA) firms, today released findings from The 2013 Fidelity RIA Benchmarking Study2, which found “High-Performing Firms3” are seeing 1.5x the growth, 1.3x the profitability and 1.5x the productivity of “All Other Eligible Firms4.” The study explored the factors contributing to High-Performing Firms’ success, and found that while focusing on a range of areas was important, these firms also have in common a focus on smart technology adoption.
|Performance Indicator||High-Performing Firms||All Other Eligible Firms|
|15 percent||10 percent|
|67 percent||50 percent|
Clients Per Advisor8
Assets Under Management (AUM) Per Advisor6
Revenue Per Advisor6
Assets from New Clients4
|9 percent||8 percent|
New Assets from Existing Clients4
|8 percent||5 percent|
Assets Withdrawn by Existing and Departing Clients4
|-5 percent||-9 percent|
|Close Business in 2 or Fewer Meetings||77 percent||57 percent|
|State of Technology Environment – Strong, Not Cutting-Edge||74 percent||53 percent|
|Source: The 2013 Fidelity® RIA Benchmarking Study|
“High-Performing Firms are growing faster and smarter than other firms, reporting a growth rate that is 50 percent higher than that of All Other Eligible Firms,” said David Canter, executive vice president and head of practice management and consulting, Fidelity Institutional Wealth Services. “In addition to attracting and retaining more of the right clients, High-Performing Firms are focusing on more effectively harnessing the technology they have instead of chasing the very latest innovations.”
According to the study, High-Performing Firms were focused on creating strong technology environments by investing in their current systems:
- Seventy-four percent of High-Performing Firms described their technology environment as strong, not cutting-edge.
- While they recognize the importance of investing in technology – it is a strategic priority for 47 percent of High-Performing Firms, as compared to only 34 percent of All Other Eligible Firms – only 12 percent of High-Performing Firms invest in the “latest and greatest” technology.
- When it comes to their biggest technology opportunity, 67 percent of High-Performing Firms ranked integrating existing systems9 in their top three opportunities.
The study found that this pragmatic approach to technology may be rooted in High-Performing Firms’ concern about disrupting their business and delivering excellent client experience in order to integrate the latest technology:
- High-Performing Firms were more likely than All Other Eligible Firms to say disruption to their business is their biggest challenge when integrating systems (60 percent compared to 43 percent of All Other Eligible Firms) and less likely to cite cost or staff skillset.
- High-Performing Firms were more likely to cite improving their clients’ experience and satisfaction as a top technology goal (77 percent vs. 61 percent of All Other Eligible Firms).
“When it comes to smart technology adoption, it’s no longer just about improving efficiency. RIA firms need to stop and ask – is this helping me grow my business? Does this enhance my clients’ experience?” continued Canter. “As new technologies come to market, RIA firms that see technology as a vehicle for success—not a measure of success—will rise to the top.”
The study also explored strategies that may help advisors build on their efforts to adopt technology in a smart and efficient way. RIA firms may want to consider10:
- Initiatives that streamline their technology environment, such as shifting to cloud-based solutions, implementing mobile technologies and creating process workflows and automation.
- Overcoming one of the biggest barriers to technology optimization: people, as the study found the top three barriers were staff related. Addressing these challenges may help firms get more out of their existing technology.
- Utilizing more functionality of current systems. The study found that those most satisfied with their systems are the firms that are utilizing the most functionality.
- Leveraging vendor-hosted systems in order to relieve the burden of supporting locally installed systems.
- Outsourcing, particularly for key processes, such as data reconciliation and client reporting.
Fidelity’s Technology and Operations Consulting offering helps RIA firms understand the importance of smart technology adoption and offers a comprehensive, practical approach to evaluating a firm’s readiness for change. Fidelity’s latest resource, Enabling the Next Wave of Growth with Workflows, was designed to help RIA firms better understand how to implement workflows that could positively impact both client and employee experience. For more details, visit http://go.fidelity.com/benchmarking2013.
About Fidelity Investments
Fidelity Investments is one of the world’s largest providers of financial services, with assets under administration of $4.6 trillion, including managed assets of $1.9 trillion, as of December 31, 2013. Founded in 1946, the firm is a leading provider of investment management, retirement planning, portfolio guidance, brokerage, benefits outsourcing and many other financial products and services to more than 20 million individuals and institutions, as well as through 5,000 financial intermediary firms. For more information about Fidelity Investments, visit www.fidelity.com.
The content provided herein is general in nature and is for informational purposes only. This information is not individualized and is not intended to serve as the primary or sole basis for your decisions as there may be other factors you should consider. Fidelity Investments does not provide advice of any kind. You should conduct your own due diligence and analysis based on your specific needs.
The registered trademarks and service marks appearing herein are the property of FMR LLC.
Fidelity Institutional Wealth Services provides brokerage products and
services and is a division of Fidelity Brokerage Services LLC. National
Financial is a division of National Financial Services LLC through which
clearing, custody and other brokerage services may be provided. Both
members NYSE, SIPC.
200 Seaport Boulevard Boston, MA 02210
Fidelity Investments Institutional Services Company, Inc., 500 Salem Street, Smithfield, RI 02917
© 2014 FMR LLC. All rights reserved.
1 Clearing and custody provided by National Financial Services LLC.
2 The 2013 Fidelity RIA Benchmarking Study (“the Study”) was fielded from 5/1/2013 - 6/28/2013. 325 firms participated in the Study. Fidelity was identified as the Study sponsor. The Study was administered by an independent third-party research firm, unaffiliated with Fidelity Investments.
3 Refers to firms identified in The 2013 Fidelity RIA Benchmarking Study. For purposes of the Study, Fidelity classifies “High-Performing Firms” as those advisory practices that demonstrate excellence (top 25 percent) in the areas of growth, profitability and productivity. In order to be deemed a “High-Performing Firm,” participants in the Study were required to meet certain criteria. Reference to the concept of "performing" in the name of the group is not intended to connote investment returns. Past performance is no guarantee of future results.
4 Firms that did not rank in the top 25% of firms eligible to be High-Performing Firms. To be considered eligible, firms had to meet the following criteria: 1) their practice was established prior to December 31, 2009, 2) they had assets under management (AUM) of $50M or more as of December 31, 2009, 3) they had two or more full-time employees as of December 31, 2012, and 4) their merger or acquisition activities contributed no more than 25% of the change in AUM between 2010–2012.
5 3 year Assets Under Management (AUM) Compound Annual Growth Rate (2009-2012)
6 2012 Earnings Before Owners’ Compensation (EBOC) Margin; EBOC Margin = EBOC as a % of revenue
7 2012 Revenue per Full-Time Equivalent (FTE)
8 Values represent 2012 median data
9 It should be noted that there are various definitions and levels of integration. For purposes of the study, integration was defined in terms of three levels: Limited integration (e.g., systems updated via a file delivery process), Moderate integration (e.g., automated data synchronization), or Full integration (e.g., automated synchronization with single sign-on and seamless user interface).
10 These strategies may have legal and compliance considerations to take into account.
Microservices are a very exciting architectural approach that many organizations are looking to as a way to accelerate innovation. Microservices promise to allow teams to move away from monolithic "ball of mud" systems, but the reality is that, in the vast majority of organizations, different projects and technologies will continue to be developed at different speeds. How to handle the dependencies between these disparate systems with different iteration cycles? Consider the "canoncial problem"...
Nov. 26, 2015 11:00 PM EST Reads: 411
I recently attended and was a speaker at the 4th International Internet of @ThingsExpo at the Santa Clara Convention Center. I also had the opportunity to attend this event last year and I wrote a blog from that show talking about how the “Enterprise Impact of IoT” was a key theme of last year’s show. I was curious to see if the same theme would still resonate 365 days later and what, if any, changes I would see in the content presented.
Nov. 26, 2015 10:00 PM EST Reads: 390
Apps and devices shouldn't stop working when there's limited or no network connectivity. Learn how to bring data stored in a cloud database to the edge of the network (and back again) whenever an Internet connection is available. In his session at 17th Cloud Expo, Ben Perlmutter, a Sales Engineer with IBM Cloudant, demonstrated techniques for replicating cloud databases with devices in order to build offline-first mobile or Internet of Things (IoT) apps that can provide a better, faster user e...
Nov. 26, 2015 09:30 PM EST Reads: 391
Container technology is shaping the future of DevOps and it’s also changing the way organizations think about application development. With the rise of mobile applications in the enterprise, businesses are abandoning year-long development cycles and embracing technologies that enable rapid development and continuous deployment of apps. In his session at DevOps Summit, Kurt Collins, Developer Evangelist at Built.io, examined how Docker has evolved into a highly effective tool for application del...
Nov. 26, 2015 07:00 PM EST Reads: 330
Cloud computing delivers on-demand resources that provide businesses with flexibility and cost-savings. The challenge in moving workloads to the cloud has been the cost and complexity of ensuring the initial and ongoing security and regulatory (PCI, HIPAA, FFIEC) compliance across private and public clouds. Manual security compliance is slow, prone to human error, and represents over 50% of the cost of managing cloud applications. Determining how to automate cloud security compliance is critical...
Nov. 26, 2015 04:00 PM EST Reads: 381
Internet of @ThingsExpo, taking place June 7-9, 2016 at Javits Center, New York City and Nov 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with the 18th International @CloudExpo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world and ThingsExpo New York Call for Papers is now open.
Nov. 26, 2015 03:30 PM EST Reads: 524
The cloud. Like a comic book superhero, there seems to be no problem it can’t fix or cost it can’t slash. Yet making the transition is not always easy and production environments are still largely on premise. Taking some practical and sensible steps to reduce risk can also help provide a basis for a successful cloud transition. A plethora of surveys from the likes of IDG and Gartner show that more than 70 percent of enterprises have deployed at least one or more cloud application or workload. Y...
Nov. 26, 2015 03:30 PM EST Reads: 444
With major technology companies and startups seriously embracing IoT strategies, now is the perfect time to attend @ThingsExpo 2016 in New York and Silicon Valley. Learn what is going on, contribute to the discussions, and ensure that your enterprise is as "IoT-Ready" as it can be! Internet of @ThingsExpo, taking place Nov 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 17th Cloud Expo and will feature technical sessions from a rock star conference faculty ...
Nov. 26, 2015 03:15 PM EST Reads: 520
We are rapidly moving to a brave new world of interconnected smart homes, cars, offices and factories known as the Internet of Things (IoT). Sensors and monitoring devices will touch every part of our lives. Let's take a closer look at the Internet of Things. The Internet of Things is a worldwide network of objects and devices connected to the Internet. They are electronics, sensors, software and more. These objects connect to the Internet and can be controlled remotely via apps and programs. ...
Nov. 26, 2015 02:15 PM EST Reads: 498
Today air travel is a minefield of delays, hassles and customer disappointment. Airlines struggle to revitalize the experience. GE and M2Mi will demonstrate practical examples of how IoT solutions are helping airlines bring back personalization, reduce trip time and improve reliability. In their session at @ThingsExpo, Shyam Varan Nath, Principal Architect with GE, and Dr. Sarah Cooper, M2Mi’s VP Business Development and Engineering, explored the IoT cloud-based platform technologies driving t...
Nov. 26, 2015 01:00 PM EST Reads: 392
SYS-CON Events announced today that Alert Logic, Inc., the leading provider of Security-as-a-Service solutions for the cloud, will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. Alert Logic, Inc., provides Security-as-a-Service for on-premises, cloud, and hybrid infrastructures, delivering deep security insight and continuous protection for customers at a lower cost than traditional security solutions. Ful...
Nov. 26, 2015 01:00 PM EST Reads: 290
We all know that data growth is exploding and storage budgets are shrinking. Instead of showing you charts on about how much data there is, in his General Session at 17th Cloud Expo, Scott Cleland, Senior Director of Product Marketing at HGST, showed how to capture all of your data in one place. After you have your data under control, you can then analyze it in one place, saving time and resources.
Nov. 26, 2015 12:00 PM EST Reads: 151
As organizations shift towards IT-as-a-service models, the need for managing & protecting data residing across physical, virtual, and now cloud environments grows with it. CommVault can ensure protection & E-Discovery of your data - whether in a private cloud, a Service Provider delivered public cloud, or a hybrid cloud environment – across the heterogeneous enterprise.
Nov. 26, 2015 11:30 AM EST Reads: 121
The Internet of Things (IoT) is growing rapidly by extending current technologies, products and networks. By 2020, Cisco estimates there will be 50 billion connected devices. Gartner has forecast revenues of over $300 billion, just to IoT suppliers. Now is the time to figure out how you’ll make money – not just create innovative products. With hundreds of new products and companies jumping into the IoT fray every month, there’s no shortage of innovation. Despite this, McKinsey/VisionMobile data...
Nov. 26, 2015 11:00 AM EST Reads: 445
In recent years, at least 40% of companies using cloud applications have experienced data loss. One of the best prevention against cloud data loss is backing up your cloud data. In his General Session at 17th Cloud Expo, Sam McIntyre, Partner Enablement Specialist at eFolder, presented how organizations can use eFolder Cloudfinder to automate backups of cloud application data. He also demonstrated how easy it is to search and restore cloud application data using Cloudfinder.
Nov. 26, 2015 11:00 AM EST Reads: 125