Lean, Focused, and Scalable: The Economics of Excellence

HIGHLIGHTS FROM THE 2025 INVESTMENTNEWS BENCHMARKING STUDY

What Differentiates Top Performers?

Ask a dozen advisors what they believe sets top quartile firms apart from others, and you’ll probably hear a dozen different answers – some themes overlap, but no clear consensus emerges. However, what’s clear from the most recent InvestmentNews Advisor Benchmarking Study is that certain key indicators (if not causality) strongly correlate with success. These firms:

• Show dramatically better control of overhead costs (25.7% of revenue) compared to their peers (45% of revenue)
• Are masters of using leverage to improve productivity – serving 170 clients per professional versus 99 clients per professional for their peers
• Capture more value per relationship – generating a revenue yield on AUM of 77bps compared to 66bps for their peers
• Have more clearly defined roles and employ a team approach to serving client relationships

These significant differences are usually not caused by broad cost-cutting. Instead, they result from reallocating expenses toward areas such as marketing and technology-driven servicing that focus on growth. This enables them to nearly double productivity per advisor and increase value per relationship through efficient processes and deliberate pricing.

Top-performing RIAs are 25% more likely than their peers to use their CRM as a central hub to serve clients more consistently.

As the InvestmentNews study notes in its conclusion:

“Ultimately, top performers embody the industry’s evolving blueprint: run leaner, serve smarter, and grow faster. Their operational structure, staffing models, and measured investment in infrastructure set the benchmark for what a high-functioning advisory firm looks like in 2024, and likely for the years ahead.”

This reinforces the core of ClientWise’s coaching focus. Early on, we understood that operational excellence is one of the best ways to increase capacity. By embedding your business through technology and documented processes, you develop valuable operational discipline that boosts your ability to scale, build a sustainable infrastructure, and allocate more time and resources to serve your clients.

Cultural cohesion

Overall, top-performing firms are more interdependent than their peers — roles are well-defined, communication is effective, and the client experience is uniform across the team. Although culture is often called ‘the invisible advantage,’ research shows it produces very tangible results: 

• According to a recent study conducted by PwC, companies with high levels of engagement report profitability levels that are 21% higher than their peers
• A cross-industry study conducted by Deloitte found that organizations with strong cultures have employees who, on average, are 40% more engaged
• And companies that prioritize DEI see up to 19% higher revenue, according to a 2018 McKinsey report

Remember that culture is more than just mission statements and office perks. It’s about how your firm’s leadership actively connects with their teams, how your organization develops talent, and how trust is built, sustained, and regularly reinforced throughout all parts of the business.

Every firm has a unique culture that influences all parts of the organization: there is a culture around work ethic and service quality, a culture around workplace dynamics, engagement, respect, and values; a culture around communication; and even a culture centered on the financial stability, security, and continuity of your firm.

Recently, I was having a conversation with a client who mentioned how shocked he was by the impact that just a few small (seemingly minor) cultural changes had on his firm’s bottom line. “Without any fanfare, about six months ago I simply started replacing the term ‘my clients’ with ‘our clients’ in every team and individual conversation. The increased sense of ownership I witnessed was obvious – and our P&L is reflecting it.”

Efficiency as a growth strategy

In an increasingly digital world, advisors (especially younger Gen X and Millennials) need a strong tech stack that makes client engagement easier, improves operations, and offers useful insights. Investing in advanced technology shows your team (and future recruits) that you’re a forward-thinking firm, able to meet changing client needs, and committed to supporting advisor productivity.

As Fidelity’s 2024 Advisor Benchmarking study highlights, despite emerging technologies like AI and new social media and video tools that enable today’s advisors to free up capacity and enhance the overall client experience, many firms have been slow to adopt them. Following a surge in technology spending during the pandemic, most advisors—especially larger firms—have reduced their investment in new technologies, spending on average just 1.3 percent of total revenue ($105,000).

However, a recent Echelon Partners M&A Deal Report highlights the importance of technology investment and integration in enhancing operational efficiencies and client service. Firms that have successfully adopted advanced technology platforms are not only more attractive acquisition targets but also tend to have substantially higher valuations.

While average firms chase volume, top performers invest in systems, people, and clarity. They see efficiency as a growth strategy, not just an austerity measure. The key thing that sets elite firms apart is their ability to thrive in a rapidly changing advisory landscape – not only by adapting but by embracing major industry trends. This includes being willing to leverage innovation, committing to investing in talent development, and prioritizing client-centric strategies.

Coaching Questions:

1. If an outside investor assessed your company's scalability tomorrow, would your systems or your people be seen as the main bottleneck?
2. Which specific operational processes or technology investments could your firm repurpose or implement now to significantly reduce overhead relative to revenue, increase client-per-professional leverage, and ultimately create greater capacity for growth?
3. What strategies might you consider using to more actively engage your team, speed up talent development, and strengthen trust to ensure high interdependence and a consistent client experience?

About ClientWise LLC

ClientWise is the premier business and executive coaching firm working exclusively with financial professionals. We specialize in helping clients optimize growth and maximize revenue by engaging as a knowledgeable partner in accomplishing specific and significant business results. Our full-service coaching program empowers financial advisors, wholesalers, managers and executives to enhance performance through customized, action-oriented solutions based on each client’s specific vision and situation.

Our certified coaches are members of the International Coach Federation (ICF). They adhere to ICF’s strict code of ethics and have the experience and insight to work with you on the unique challenges and opportunities you face each day.

Drawing from an in-depth knowledge of the financial industry, ClientWise’s mission is to professionally develop industry leaders and consistently raise the bar for industry service, commitment and integrity. Simply put, our singular focus is to help you get clear, get focused, and get results.