3 ways to boost your business in 2013

By Staff | March 12, 2013 | Last updated on March 12, 2013
2 min read

Advisors increased production and significantly raised average assets under management in 2012, finds a report from PriceMetrix.

Assets under management grew 9% in 2012, rising from $74 million at year-end 2011 to $80.8 million at year-end 2012. Average annual revenue also grew 2%, increasing from $537,000 to $550,000.

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At the same time, average revenue on assets (RoA) declined 3%, as revenue growth did not keep pace with asset growth. Advisors earned an average RoA of 0.69%, down from 0.72% in 2011.

Further, equity trade volumes also continued to decline. The average advisor completed 346 equity transactions in 2012, down 10% from 386 in 2011. Average equity principal declined from $8.9 million in 2011 to $7.7 million.

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“The continued decline in equity trade volume remains a concern across the industry, as it restrains overall revenue growth,” says Doug Trott, president and CEO of PriceMetrix. “Reducing the rate of discounting remains a challenge for advisors and their firms, as well as a significant growth opportunity.”

He adds, “Advisors need to continue to increase the value of their service by working with fewer households, deepening client relationships and increasing their capacity to service their remaining clients. Advisors also need to ensure that their pricing reflects their increase in value.”

Read: Manage all assets for clients

Here are some areas of potential for advisors in 2013.

1. 39% of households have less than $50,000 in investable assets. Advisors should either consider dropping households because they’re too small or work to increase the amount of investible assets.

2. Advisors have the opportunity to build even deeper relationships with clients as 42% of households have only one account.

3. Advisors need to continue appropriately pricing the value they provide and stop discounting. The average equity trade is priced at a 35% discount meaning advisors are giving up an average of $46,000 in discounts every year.

Read: U.S. advisors’ compensation to rise: report

Additional findings:

  • The proportion of assets held in fee-based accounts climbed from 26% in 2011 to 28% in 2012;
  • Fee-based revenue increased from 43% to 45%;
  • The average number of fee accounts per advisor rose from 85 to 92;
  • The average RoA on fee-based accounts declined from 1.14% to 1.06% in 2012, which is partly due to an increase in the number of large households serviced by advisors that typically pay a lower amount in fees;
  • Advisors reduced the number of households they serve from an average of 165 households in 2011 to 159;
  • Average household assets increased 13% from $435,000 in 2011 to $491,000 in 2012, while the proportion of households with at least $250,000 rose from 34% to 38%;
  • Average annual household revenue increased 4% from $3,175 to $3,300;
  • Households with retirement accounts increased from 69% in 2011 to 70%. Since households with retirement accounts produce higher average revenue than non-retirement households ($3,400 compared to $2,400), this is an important shift for advisors.
Advisor.ca staff


The staff of Advisor.ca have been covering news for financial advisors since 1998.