A new PriceMetrix report reveals how to predict an advisor’s success.
Turns out, experience doesn’t matter.
“The data showed no clear relationship between experience and future production. Experience had a negligible effect on predicted future production. Below-average producers, average producers and outperformers are found in roughly equal numbers at all levels of experience,” says the report, Moneyball for Advisors.
Further, “An advisor who becomes a top producer after five years is a more attractive prospect [for a firm to hire] than an advisor who reaches the same level of production after 20: the advisor with five years experience is on a higher growth trajectory.”
Read: Surviving the early years
So what does make a difference?
“We discovered that for every high-asset household (defined as those with $250,000 or more in investable assets) in an advisor’s book, predicted future annual revenue is expected to increase by $1,650,” the report says.
It adds advisors who have households with multiple accounts also tend to be more successful.
Read: Small accounts are a drag: PriceMetrix
To position yourself for future growth, the report suggests:
- Acquire only households with greater than $250,000 in assets
- If households have less than $250,000 in assets, move them to another service channel
- Cross sell your households, starting with retirement accounts
- Focus your new product sales energies on fee and managed business