Slower Rate of Growth - Business Management for Financial Advisers

In 1990’s, there was an illusion for a lot of people who invested in the markets, including financial advisors, who witnessed extraordinary rates of revenue growth tied to inevitable assets. So, the market correction at the turn of the century and the modest returns projected for the foreseeable future have made revenue growth— at least organic growth—more of a challenge.

For rapid revenue growth, the advisors conspire for the following conditions:

  1. Most experts predict long-term market rates of return of below 8 percent.
  2. Inflation remains at very low rates (although that could change).
  3. There is no longer an Internet bubble to give an artificial lift to the markets—and consequently to fees.
  4. Many advisers have already reached their capacity in terms of the number of new clients they can add.
  5. More pressure is likely on pricing, with new competition and more demanding clients.
  6. If a firm’s service offering is one-dimensional, justifying higher fees is hard.
  7. Many advisers lack a well-developed, systematic process for marketing.

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