Congratulations to all RIA firms for your hard work and success over the last two years, it has led to some great results.
Assets under management were up nearly 20% from the prior year and revenue increased 23% for all firms at the median.
Top-performing firms continue to lead the way.
Top-performing firms got even stronger growth at the median, with nearly 30% increase in both AUM and revenue.
The value proposition RIA firms offer is exactly what many investors want and need during times of uncertainty and volatility.
Client retention remains high because clients see and understand your commitment to working in their best interests.
This client-first commitment coupled with an entrepreneurial mindset has helped drive three key trends.
First, talent is now a top strategic priority.
Second, more firms are turning to digital processes to improve efficiency.
And, third, written strategies are helping drive organic growth.
Let's go ahead and unpack these just a little bit.
This year for the first time ever, recruiting new staff is a top strategic priority for firms, jumping ahead of acquiring new clients through referrals, which typically takes that number one spot.
80% of all firms plan to hire in 2022.
And based on current growth, the median firm in the study will need to hire six new roles in the next five years to keep up with that growth.
Top-performing firms also take a very proactive approach to hiring and retaining talent.
Our study found that they're more likely to have documented talent strategies and an employee value proposition to help them compete in a tight labor market.
Another key trend is that the vast majority of firms we surveyed use digital workflows and continue to adopt digital capabilities.
This leap in digital adoption since the pandemic began has led to major productivity and efficiency gains for all firms.
Top-performing firms are more often high adopters of digital tools and standardized workflows.
This led to tangible efficiency gains with these firms spending nearly 20% less per client on operations and administration.
Organic growth was also a major driver of overall growth in 2021.
But what powered these gains?
Firms with a written marketing plan, ideal client persona, and client value proposition gained 42% more new clients than firms that didn't have all three in place.
Documenting referral plans also helped to make an impact.
Firms with written referral plans generated more new clients from business partners and from client referrals.
A huge thank you to each and every firm who participated in this study.
And even if you didn't participate, please take a look at our website because we will share a wealth of information about where our industry stands and how we're evolving.
Thank you so much.
Be safe and be well.