|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Assets Withdrawn by Existing and Departing Clients4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.
Explosive growth in connected devices. Enormous amounts of data for collection and analysis. Critical use of data for split-second decision making and actionable information. All three are factors in making the Internet of Things a reality. Yet, any one factor would have an IT organization pondering its infrastructure strategy. How should your organization enhance its IT framework to enable an Internet of Things implementation? In his session at @ThingsExpo, James Kirkland, Red Hat's Chief Arch...
Jul. 30, 2015 07:30 PM EDT Reads: 1,384
For IoT to grow as quickly as analyst firms’ project, a lot is going to fall on developers to quickly bring applications to market. But the lack of a standard development platform threatens to slow growth and make application development more time consuming and costly, much like we’ve seen in the mobile space. In his session at @ThingsExpo, Mike Weiner, Product Manager of the Omega DevCloud with KORE Telematics Inc., discussed the evolving requirements for developers as IoT matures and conducte...
Jul. 30, 2015 07:15 PM EDT Reads: 290
Providing the needed data for application development and testing is a huge headache for most organizations. The problems are often the same across companies - speed, quality, cost, and control. Provisioning data can take days or weeks, every time a refresh is required. Using dummy data leads to quality problems. Creating physical copies of large data sets and sending them to distributed teams of developers eats up expensive storage and bandwidth resources. And, all of these copies proliferating...
Jul. 30, 2015 06:30 PM EDT Reads: 877
Malicious agents are moving faster than the speed of business. Even more worrisome, most companies are relying on legacy approaches to security that are no longer capable of meeting current threats. In the modern cloud, threat diversity is rapidly expanding, necessitating more sophisticated security protocols than those used in the past or in desktop environments. Yet companies are falling for cloud security myths that were truths at one time but have evolved out of existence.
Jul. 30, 2015 06:00 PM EDT Reads: 1,795
Digital Transformation is the ultimate goal of cloud computing and related initiatives. The phrase is certainly not a precise one, and as subject to hand-waving and distortion as any high-falutin' terminology in the world of information technology. Yet it is an excellent choice of words to describe what enterprise IT—and by extension, organizations in general—should be working to achieve. Digital Transformation means: handling all the data types being found and created in the organizat...
Jul. 30, 2015 05:00 PM EDT Reads: 1,081
Public Cloud IaaS started its life in the developer and startup communities and has grown rapidly to a $20B+ industry, but it still pales in comparison to how much is spent worldwide on IT: $3.6 trillion. In fact, there are 8.6 million data centers worldwide, the reality is many small and medium sized business have server closets and colocation footprints filled with servers and storage gear. While on-premise environment virtualization may have peaked at 75%, the Public Cloud has lagged in adop...
Jul. 30, 2015 04:00 PM EDT Reads: 2,196
SYS-CON Events announced today that HPM Networks will exhibit at the 17th International Cloud Expo®, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. For 20 years, HPM Networks has been integrating technology solutions that solve complex business challenges. HPM Networks has designed solutions for both SMB and enterprise customers throughout the San Francisco Bay Area.
Jul. 30, 2015 03:45 PM EDT Reads: 440
The time is ripe for high speed resilient software defined storage solutions with unlimited scalability. ISS has been working with the leading open source projects and developed a commercial high performance solution that is able to grow forever without performance limitations. In his session at Cloud Expo, Alex Gorbachev, President of Intelligent Systems Services Inc., shared foundation principles of Ceph architecture, as well as the design to deliver this storage to traditional SAN storage co...
Jul. 30, 2015 03:00 PM EDT Reads: 1,734
The Software Defined Data Center (SDDC), which enables organizations to seamlessly run in a hybrid cloud model (public + private cloud), is here to stay. IDC estimates that the software-defined networking market will be valued at $3.7 billion by 2016. Security is a key component and benefit of the SDDC, and offers an opportunity to build security 'from the ground up' and weave it into the environment from day one. In his session at 16th Cloud Expo, Reuven Harrison, CTO and Co-Founder of Tufin,...
Jul. 30, 2015 03:00 PM EDT Reads: 476
MuleSoft has announced the findings of its 2015 Connectivity Benchmark Report on the adoption and business impact of APIs. The findings suggest traditional businesses are quickly evolving into "composable enterprises" built out of hundreds of connected software services, applications and devices. Most are embracing the Internet of Things (IoT) and microservices technologies like Docker. A majority are integrating wearables, like smart watches, and more than half plan to generate revenue with ...
Jul. 30, 2015 02:30 PM EDT
The Internet of Everything (IoE) brings together people, process, data and things to make networked connections more relevant and valuable than ever before – transforming information into knowledge and knowledge into wisdom. IoE creates new capabilities, richer experiences, and unprecedented opportunities to improve business and government operations, decision making and mission support capabilities.
Jul. 30, 2015 01:45 PM EDT Reads: 259
The Cloud industry has moved from being more than just being able to provide infrastructure and management services on the Cloud. Enter a new era of Cloud computing where monetization’s services through the Cloud are an essential piece of strategy to feed your organizations bottom-line, your revenue and Profitability. In their session at 16th Cloud Expo, Ermanno Bonifazi, CEO & Founder of Solgenia, and Ian Khan, Global Strategic Positioning & Brand Manager at Solgenia, discussed how to easily o...
Jul. 30, 2015 01:45 PM EDT Reads: 373
In their session at 17th Cloud Expo, Hal Schwartz, CEO of Secure Infrastructure & Services (SIAS), and Chuck Paolillo, CTO of Secure Infrastructure & Services (SIAS), provide a study of cloud adoption trends and the power and flexibility of IBM Power and Pureflex cloud solutions. In his role as CEO of Secure Infrastructure & Services (SIAS), Hal Schwartz provides leadership and direction for the company.
Jul. 30, 2015 01:30 PM EDT
Rapid innovation, changing business landscapes, and new IT demands force businesses to make changes quickly. The DevOps approach is a way to increase business agility through collaboration, communication, and integration across different teams in the IT organization. In his session at DevOps Summit, Chris Van Tuin, Chief Technologist for the Western US at Red Hat, will discuss: The acceleration of application delivery for the business with DevOps
Jul. 30, 2015 12:45 PM EDT Reads: 1,111
The speed of software changes in growing and large scale rapid-paced DevOps environments presents a challenge for continuous testing. Many organizations struggle to get this right. Practices that work for small scale continuous testing may not be sufficient as the requirements grow. In his session at DevOps Summit, Marc Hornbeek, Sr. Solutions Architect of DevOps continuous test solutions at Spirent Communications, explained the best practices of continuous testing at high scale, which is rele...
Jul. 30, 2015 12:00 PM EDT Reads: 1,377