Today's Viewpoint: A MarshBerry Publication

Strategic Planning: The Key to Wealth Advisory Firm Growth

How can wealth advisory firms boost their growth and keep a competitive edge in an industry so heavily dependent on market performance and recurring revenue? Firms at the forefront of the industry consistently utilize strategic planning in wealth management to gain their edge.

RIA and retirement planning firms looking to get a competitive edge should look towards those industry leaders who consistently keep their companies out in front – regardless of external factors. One habit of the most highly effective firms, contributing to their wealth advisory firm growth, is consistently setting future goals and establishing strategic plans in wealth management. These plans outline and prioritize the necessary actions to achieve their objectives. According to a recent industry benchmark study – three out of four RIA firms that are ranked in the top 20% by performance boast a strategic plan, compared to just 54% of all other firms.1 Correlation is not causation, but the numbers indicate that a mediocre firm with a solid plan is as rare as a top-performing firm living on its wits alone.

Walking the Talk: Making Strategic Planning Second Nature in Wealth Management

Logically speaking, strategic planning should be second nature to wealth advisory firms. Advisors talk with clients every day and develop plans for protecting and optimizing their financial well-being. Most wealth advisory leaders are similarly motivated to grow their own businesses and create great workplaces with plenty of career opportunity for their colleagues. The solution for any firm that seeks to build an enduring business that can support the needs of its clients and colleagues today and in the future is obvious: Define your end game, put it on paper and commit to getting it done.

However, effective business planning in wealth management is easier said than done. Some wealth and retirement planning firms find themselves too absorbed in daily operations and client problem-solving to set aside time for their own strategic planning. In other words, they are too busy IN the business to focus ON the business. For others, strategic planning may not even seem like a necessary exercise. It’s easy for an “if it ain’t broke, don’t fix it” mentality to take hold as the good times roll. After all, the best time to repair your roof is when the sun is shining. Firms need to be prepared to weather the next storm whenever it comes.

But committing long and short-term goals to paper is just the first step in creating an enduring strategy. A strategic planning discipline creates a shared vision for the operational, financial, and talent aspirations of your firm. The most successful strategic plans harness the power of a proven framework that challenges conventional processes and forces critical thinking to answer hard questions, such as:

  1. Where are you today? How do you compare with others? (i.e., comparative benchmarking) Have you done a revenue and expense analysis? What are your operational and market impacts? Firms that are growing organically and outperforming their peers understand that “what got them here won’t get them there”, because they recognize that each stage of a firm’s lifecycle presents new opportunities and unique challenges
  2. Where do you envision your firm’s future? Is your financial strategy aligned with your firm’s mission and vision, and does it account for succession planning for wealth management firms? Top-performing firms nurture a competitive mindset year after year and always seem to have an idea of where they want to be one, five or 10 years from now, and have a detailed strategic plan of how to get there.
  3. What is your action plan? Do you have a deliberate and intentional action plans of how to get there? An organizational strategic roadmap is developed through regular planning sessions and serves as the axel around which everything else revolves. These plans generally outline how a firm intends to meet goals and achieve growth by hiring, retaining, and motivating people, how they will structure different teams and reporting lines, and how they will optimize workflows to deliver a high-quality, repeatable experience for its clients.

All of these will lead your firm to innovate, mobilize efficiencies and accelerate initiatives to achieve your long-term objectives.

What are top-performing wealth firms doing to stay ahead?

Top-performing firms recognize that attracting talent in wealth management and the right strategy for staffing and compensation is essential for gaining a competitive edge. These elements significantly impact a firm’s expenses. These firms also recognize the type of talent they need in order to deliver their vision and will dedicate as much energy in attracting the right staff as they do in attracting clients. They know that talented people are essential for sustainable competitive advantage and will continually ask themselves if they have the right people in the right places, and who is doing what, and why.

But high performing firms don’t just plug new talent into the pipeline, sit back and hope for the best. They have a clear strategy for nurturing and retaining their people, because high-growth businesses depend on the capabilities of existing staff expanding in tandem.

These firms also have a clear succession strategy that helps to steady the ship when key personnel move on or retire. This builds confidence among both clients and staff that a firm’s leaders are planning for the continuity and longevity of the business, and hence their financial futures and careers.

Don’t Go at It Alone

Developing a strategic plan, especially one focused on wealth advisory firm growth, can be a challenging task, particularly when a firm is lean or stretched thin by client needs. This is where strategic consultants for wealth management can play a significant role. Not every organization has the resources to evaluate and optimize their compensation strategy, or to create the right training and development programs for staff retention, or the time to craft a perfect succession plan. But at some point, those important efforts that may not immediately be urgent are likely to catch up with those firms, and the storm will hit and rip the roof off. (i.e., key advisors retire or jump ship, challenging market conditions, new client pipeline dries up, etc.)  

Wealth advisory firms that are committed to grow shouldn’t shy away from partnering with expert facilitators and consultants to guide them through the strategic planning process. Experienced strategic planning partners can bring fresh, independent thinking to the business, while armed with deep industry knowledge and the understanding of what top-performing firms are doing. They can also help execute and keep plans on track, while challenging leadership to make the hard decisions.

Once firms have defined their goals, chosen their partners, and embarked on their journey, strategic planning in wealth management and effective business planning shouldn’t be relegated to the past. These plans are now living, breathing documents that will allow them to measure success, change course, and continue charting the path. They’ll need to keep the strategic plan out and in the open and refer to it often, rather than let it gather dust on the shelf. It is now their roadmap to growth and success.

If you have questions about Today’s ViewPoint, or about the process for creating an effective strategic plan that can help drive growth for your firm, please email or call Kim Kovalski, Managing Director, at 440.769.0322.

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MarshBerry is your trusted advisor in the wealth industry.

MarshBerry is a leading sell side advisor in the financial services industry with specialty practices in insurance and wealth management. Our advisory and consulting practices support advisors throughout their business lifecycles and include sell-side advisory, perpetuation planning, equity and debt capital raises, business and strategic planning, valuations, and industry benchmarking. Learn more about MarshBerry’s Wealth Advisory services.

Contact Kim Kovalski
If you have questions about Today's ViewPoint, or would like to learn more about how MarshBerry can help your firm determine its path forward, please email or call Kim Kovalski, Managing Director, at 440.769.0322.


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