Advisory firms represent $5 trillion in assets under management, and the independent model continues to win considerable market share. According to Schwab Advisor Services’ 2018 RIA Benchmarking Study, for firms with over $250 million in assets, total assets under management (AUM) grew 16.2% at the median year over year, revenue growth increased from 3.6% in 2016 to 11.9% in 2017 and, for the first time, average assets per client crossed the $2 million mark. In addition, the median firm recorded a five-year AUM compound annual growth rate of 10.9% — an enviable growth rate for any business.
As remarkable as that growth is, some firms are growing at an even greater rate — the top 20% of firms have a five-year AUM CAGR of 16%, meaning they have more than doubled in size in a five-year period.
The outperformance of these firms is driven by their innovative mindset and ability to effectively prioritize their business needs. As these firms seek new ways to operate their businesses, they focus on five guiding principles.
While all firms demonstrate growth, some firms achieve superior results.
1. Effective planning and execution are a leading indicator of success
Outperforming firms engage in strategic planning and as they grow, they are more likely to have a written strategic plan — 69% of firms with $1 billion or more in AUM have a written strategic plan compared with 51% of firms with $250 to $500 million in AUM. In addition, outperforming firms focus on and execute their strategic plans. More than simply keeping a list of annual objectives, these firms’ leaders articulate a vision for what they want to look like in the future, which allows them to:
• Set direction and gain alignment across the firm.
• Drive action on issues that matter.
• Choose among initiatives that compete for firm resources.
2. Value is defined through your clients’ eyes
Outperforming firms understand that the client’s perception about his or her interaction with a firm determines whether that experience is valuable. That’s why outperforming firms are very clear about who their ideal clients are. They identify what those clients really want and design an experience to meet or exceed those needs. This allows advisers more time to establish trust and build sustaining relationships, which can also lead to referrals.
Firms with a documented ideal client persona and a client value proposition earn significantly more than those without those strategies.
In addition, many firms differentiate by offering value-added services for their ideal clients. According to Schwab’s Spring 2017 Independent Advisor Outlook Study, 41% of firms see services beyond investment advice and wealth management – such as charitable, tax and health care planning – as key differentiators.
3. Operational excellence creates greater capacity for clients
Efficient advisory firms serve more clients representing greater AUM, yet they spend less time per relationship. These firms leverage technology, workflows and training to create consistent ways of working across the business to achieve operational excellence. According to Schwab’s 2018 RIA Benchmarking Study, 83% of these firms integrate one or more data sources or systems with their CRM, and 60% of firms use standardized workflows within their CRM.
Operational excellence also involves a strong culture of compliance, which is critical to protecting client trust. Ninety percent of firms emphasize employee training related to cybersecurity initiatives, and many have programs that increase client awareness and education about cybersecurity.
4. Your reputation is your brand
In 2017, growth in assets from new clients for fastest-growing firms totalled 9.1% – two times more than all other firms.
Fastest-Growing Firms’ Key Metrics
|
Fastest-growing firms |
All other firms |
Multiple |
| 5-year net organic growth CAGR |
15.4% |
3.9% |
3.9x |
| Net organic growth in 2017 |
$67 million |
$25 million |
2.7x |
| Number of new clients in 2017 |
36 |
19 |
1.9x |
| Assets from new clients in 2017 |
$48 million |
$24 million |
2x |
| Growth in assets from new clients in 2017 |
9.1% |
4.2% |
2.2x |
For top growers, existing client referrals and marketing contributed equally to new client asset growth, which indicates a more robust growth strategy that incorporates a broad set of tactics.
These firms extend their brand by word of mouth and other tactics, including networking, community involvement, social media, email, webinars and speaking engagements. They consistently tell their stories through multiple channels and effectively communicate their value propositions in their target markets.
5. People are your most important asset
Virtually nothing of any importance can be accomplished without incredible talent. With 73% of firms planning to hire in the next 12 months, advisers face tough competition. Firms must protect their greatest assets by creating a cycle of opportunity. Top-performing firms effectively incentivize quality talent with attractive compensation packages including salary and benefits. These firms also develop their talent and reward them with long-term opportunities. Often, they create a clear path to equity ownership, encouraging a broader set of individuals to adopt an owner’s mentality and influence firm growth.
This Durban attorney is a ‘real hero’
/0 Comments/in Recognition /by News DeskA Durban legal eagle has been selected as the “Real Hero” of the We Are Durban campaign, which celebrates the city’s heroes during Women’s Month.
We Are Durban helps charities in the eThekwini area to reach their potential, by helping them use a developmental approach to give back instead of a relief type approach.
Charmaine Schwenn, the director of Durban-based law firm Schwenn Inc. has been using her skills to help develop the city’s residents.
She was nominated as a “Real Hero” for her active involvement in pro-bono work, including assisting ProBono.org.
Schwenn has served on the Jes Foord Foundation, which assists survivors of rape, and was recently appointed as the Small Claims Court Commissioner to provide access to justice to those who cannot afford the court process.
We Are Durban’s managing director, Linda Morrison, said they aimed to highlight local and inspiring women within the various organisations they represent.
“These women challenge us to be more than we have been in the past and are changing their community for the better. We value our Real Heroes who are hope carriers, impact champions and change agents. Charmaine is a regular speaker at events motivating fellow businesswomen and encouraging them to succeed in their chosen fields. With a heart for upliftment and empowerment, she is deeply committed to volunteering and actively involved in multiple organisations,” said Morrison.
Blockchain technology will revolutionise these 5 industries
/0 Comments/in Blockchain /by News DeskYou’ve probably heard about blockchain technology through cryptocurrency, but did you know that blockchain technology is expected to revolutionise industries like real estate, transportation and even social justice?
Blockchain technology may have been made for bitcoin, but its potential to make transactions more secure is one of the most exciting possibilities for using this powerful technology. Innovation is most commonly known as the underlying algorithm of cryptocurrency. One day, businesses in every industry may use blockchain to record and verify every transaction. The decentralised characteristic of the utility makes it an appealing business resource, and enterprises covet the transparency and finality the digital recordkeeping application.
Blockchain Can Increase Trust & Accountability
Privacy issues are a concern for every American. With most businesses in the United States keeping their records and transactions mostly online, Americans have begun to become jaded as data breaches hit the news. While blockchain technology can’t prevent all data theft and cybercrime, it could help make transactions more secure, improving trust in businesses’ ability to protect consumer data. With cybercrime on the rise, the technology has arrived just in time. The first applications that will give way to blockchain are the most insecure transaction methods. From all of the disruption I’ve seen already in various industries, I believe that blockchain technology is a viable resource for any industry or field that conducts transactions.
Here are the five industries, institutions and fields that will experience the most exciting disruption due to blockchain technology in the near future.
The Finance Industry
Governments and large corporations are researching blockchain technology closely to unearth ways to utilise the resource. The finance industry is investigating blockchain intensely since fraud is a huge problem for banks and other financial organisations. Finance executives believe that the technology is a potentially ideal solution for security when transferring money from one account to another—always the most vulnerable point in any transaction. Blockchain may disrupt not only the field of digital security but also that of logistics and other fields across many industries. Cryptocurrency has also made its way into the crowdfunding and investment markets and led to the birth of crypto exchanges such as Okcoin, Poloniex and ShapeShift. This shift has not only opened up a number of new opportunities for individuals to invest, but also has created new job opportunities such as a crypto-investment banker. Although new, projections say that this position can expect to make as much as traditional investment bankers who have a median salary of approximately $81,339.
Another new feature brought on by blockchain tech is that investors can now buy into initial coin offerings (ICOs) in the same way that they buy into initial public offerings (IPOs). This is reshaping the investment world by eliminating geographical boundaries and speeding up the investment transaction process.
Social Justice
Enterprises and agencies could potentially use blockchain technology to securely record and verify inventories, monitor resources and redistribute assets. Via these means, the technology can pave the way toward a sharing economy. Inequality, income disparities and consistent income are serious problems in modern capitalist societies around the globe, and new technologies threaten to enhance these problems. Blockchain is a resource that can empower a sharing economy, and it can potentially accelerate the process of ensuring full inclusion in economic prosperity, rather than contribute to conditions that promote inequality and conflicts.
American Energy Grids
Energy grids in the United States are deteriorating and outdated. Today’s energy networks are vulnerable to elements such as natural disasters and climate changes. Many researchers are working on solutions to replace the outmoded system, and some believe that blockchain will provide the answer.
In Brooklyn, New York and other municipalities, participants in an energy experiment collect power using solar panels and exchange it using computerised “smart contracts.” The participants also install smart power meters as a part of the project. They use blockchain to secure and verify all transactions sans utility companies or any other third-party, saving on costs and increasing efficiency.
Blockchain technology could also help to fend off attacks from more than just Mother Nature. In 2018, information came to light that Russian hackers were able to gain access to United States electric grids, giving them the ability to cut off and control power. With our massive dependency on electricity, potential attacks could cause mayhem and economic damage. More secure networks, like those offered by the blockchain, could reduce the likelihood that hackers would be able to gain access to American energy grids.
The Real Estate Field
The real estate industry exemplifies the disruptive potential of blockchain technology. The transfer of real property is a complicated and extensive process, but blockchain technology can potentially allow property buyers and sellers to transfer property rights instantaneously. Sellers could use the technology to securely transfer titles and deeds to new owners, and buyers could pay for the transactions via cryptocurrency. Stakeholders could also use blockchain to send property information to the appropriate government agencies.
Closing costs are a big expense for homeowners and buyers alike. While blockchain technology won’t cut out commissions and related expenses, a simpler buying process could potentially reduce the cost and hassle of buying a home, making it more realistic for young people to get into the real estate market.
The Transportation Industry
Researchers imagine a future where blockchain and the Internet of Things (IoT) combine to make smart cities a reality. Municipalities could connect sensors for street signs, traffic lights, vehicles and other items to the IoT, enabling the rerouting of traffic for maximum efficiency. Scientists hope that by using blockchain in this manner they can reduce commute times, traffic congestion and vehicle emissions. The blockchain technology can also provide potential conveniences such as vehicle parking and be charging location and payment; traffic ticket payment; and accident and maintenance monitoring services.
Final Thoughts
Analysts forecast that bitcoin will achieve a total value of $1.2 trillion towards the end of 2018. However, forward-thinking individuals see the value of blockchain beyond its original application for digital currency transactions. Bitcoin took off rapidly as more people brought into the idea of a currency that’s free of government or institutional regulation and valued based on quantifiable, although highly complex, supply and demand. While the excitement about bitcoin is tempering, there’s great interest in its underlying blockchain technology. It’s hard to not see the value in cutting out middlemen, increasing security and saving precious time and expenses.
Latham & Watkins LLP hires senior IP litigator
/1 Comment/in Hires /by News DeskLatham & Watkins LLP has hired Rachel Weiner Cohen as counsel in its litigation and trial department.
Cohen joins Latham and Watkins from WilmerHale where she was counsel. She has extensive experience in both US and international intellectual property disputes.
Her practice ranges from international arbitrations and civil investigations to general commercial litigation.
Commenting on the move, global co-chair of the intellectual property practice David Callahan said: “We are excited to welcome Rachel Weiner Cohen to Latham’s powerhouse IP team.”
Office managing partner for Latham and Watkins in Washington DC, Michael Egge, added: “Cohen is well-positioned to help us build on our recent string of major appellate victories.”
Cohen’s addition to Latham & Watkins LLP follows the recent appointment of senior trial lawyers Tara Elliott, Jamie Underwood and Kevin Wheeler.
EU is ‘a difficult place for business’, says Pippa Malmgren
/1 Comment/in Brexit /by News DeskPippa Malmgren, who is a leading US economic adviser, has ripped into business scaremongering around the Brexit uncertainty.
Dr Malmgren, who also serves as an adviser to the UK Department of International Trade, pointed out that foreign investment in the UK is still rising despite Project Fear.
She added that Britain is far better place to do business than Europe, where taxes and regulatory red-tape are an economic barrier to investment.
These remarks follows news that the pound has fallen to its lowest level against the dollar and the euro this year.
At the same time, Britain’s economy rebounded in the second quarter this year despite Brexit uncertainty according to Office for National Statistics figures.
Dr Malmgren, who previously served in the White House under George W Bush, discussed the British economy in light of the growing risk of a no deal Brexit.
The businesswoman told Bloomberg: “The key thing to remember is that many of the investors are saying I may not like the uncertainty of Brexit, but it is not easy to make money on the continent.
“It is not an either-or situation. Foreign direct investment in the UK is still rising.
“The huge irony is that the weaker the sterling is, the more competitive the UK is.”
She added: “Money is a lot like water and it will move where it faces the least resistance.
“Unless the UK raises its taxes and regulatory red tape above the EU, then capital will continue to flow into the UK.
“More so still if the sterling is weaker.
“This idea that the City of London has to be smaller if there is no deal after Brexit simply doesn’t add up.”
The growing possibility that talks between the UK and Brussels will break down in the coming months has sparked economic fears.
Despite this, long-term investment in Britain by foreign businesses stood at £1.564 trillion, which is £12 billion or 0.8 percent higher than in 2016.
The world’s fifth-biggest economy relied on the services industry for growth in the second quarter.
K2 Intelligence named in The Recorder’s ‘Best of 2018’ list
/0 Comments/in Recognition /by News DeskK2 Intelligence, an industry-leading investigative, compliance, and cyber defence services firm founded by Jules B. Kroll and Jeremy M. Kroll, announced today that it has been named by California-based legal news site, The Recorder to the “Best of 2018” list of legal services vendors in the categories of “Forensic Account Provider” and “Private Investigation Firm.”
According to The Recorder, the “Best Of” awards were developed to help lawyers and law firm administrators identify the finest legal products and service providers. The annual “Best Of” supplements recognise the vendors that stand out among their competitors in providing lawyers with the essentials they require to compete in today’s legal market.
About K2 Intelligence
K2 Intelligence is an industry-leading investigative, compliance, and cyber defence services firm founded in 2009 by Jeremy M. Kroll and Jules B. Kroll, who is credited with originating the modern corporate investigations industry. Redefining 21st-century corporate intelligence, the firm combines subject-matter expertise with cutting-edge technology, bringing to bear the industry’s best multidisciplinary teams to solve its clients’ most difficult problems.
With offices in New York, London, Madrid, Geneva, and Los Angeles, K2 Intelligence advises governments, companies, boards, and individuals in business areas including investigations and disputes; regulatory compliance, cyber defence, construction and real estate, strategic risk and security, and private client services.
5 principles that set apart top-performing advisory firms
/1 Comment/in Insights /by News DeskAdvisory firms represent $5 trillion in assets under management, and the independent model continues to win considerable market share. According to Schwab Advisor Services’ 2018 RIA Benchmarking Study, for firms with over $250 million in assets, total assets under management (AUM) grew 16.2% at the median year over year, revenue growth increased from 3.6% in 2016 to 11.9% in 2017 and, for the first time, average assets per client crossed the $2 million mark. In addition, the median firm recorded a five-year AUM compound annual growth rate of 10.9% — an enviable growth rate for any business.
As remarkable as that growth is, some firms are growing at an even greater rate — the top 20% of firms have a five-year AUM CAGR of 16%, meaning they have more than doubled in size in a five-year period.
The outperformance of these firms is driven by their innovative mindset and ability to effectively prioritize their business needs. As these firms seek new ways to operate their businesses, they focus on five guiding principles.
While all firms demonstrate growth, some firms achieve superior results.
1. Effective planning and execution are a leading indicator of success
Outperforming firms engage in strategic planning and as they grow, they are more likely to have a written strategic plan — 69% of firms with $1 billion or more in AUM have a written strategic plan compared with 51% of firms with $250 to $500 million in AUM. In addition, outperforming firms focus on and execute their strategic plans. More than simply keeping a list of annual objectives, these firms’ leaders articulate a vision for what they want to look like in the future, which allows them to:
• Set direction and gain alignment across the firm.
• Drive action on issues that matter.
• Choose among initiatives that compete for firm resources.
2. Value is defined through your clients’ eyes
Outperforming firms understand that the client’s perception about his or her interaction with a firm determines whether that experience is valuable. That’s why outperforming firms are very clear about who their ideal clients are. They identify what those clients really want and design an experience to meet or exceed those needs. This allows advisers more time to establish trust and build sustaining relationships, which can also lead to referrals.
Firms with a documented ideal client persona and a client value proposition earn significantly more than those without those strategies.
In addition, many firms differentiate by offering value-added services for their ideal clients. According to Schwab’s Spring 2017 Independent Advisor Outlook Study, 41% of firms see services beyond investment advice and wealth management – such as charitable, tax and health care planning – as key differentiators.
3. Operational excellence creates greater capacity for clients
Efficient advisory firms serve more clients representing greater AUM, yet they spend less time per relationship. These firms leverage technology, workflows and training to create consistent ways of working across the business to achieve operational excellence. According to Schwab’s 2018 RIA Benchmarking Study, 83% of these firms integrate one or more data sources or systems with their CRM, and 60% of firms use standardized workflows within their CRM.
Operational excellence also involves a strong culture of compliance, which is critical to protecting client trust. Ninety percent of firms emphasize employee training related to cybersecurity initiatives, and many have programs that increase client awareness and education about cybersecurity.
4. Your reputation is your brand
In 2017, growth in assets from new clients for fastest-growing firms totalled 9.1% – two times more than all other firms.
Fastest-Growing Firms’ Key Metrics
For top growers, existing client referrals and marketing contributed equally to new client asset growth, which indicates a more robust growth strategy that incorporates a broad set of tactics.
These firms extend their brand by word of mouth and other tactics, including networking, community involvement, social media, email, webinars and speaking engagements. They consistently tell their stories through multiple channels and effectively communicate their value propositions in their target markets.
5. People are your most important asset
Virtually nothing of any importance can be accomplished without incredible talent. With 73% of firms planning to hire in the next 12 months, advisers face tough competition. Firms must protect their greatest assets by creating a cycle of opportunity. Top-performing firms effectively incentivize quality talent with attractive compensation packages including salary and benefits. These firms also develop their talent and reward them with long-term opportunities. Often, they create a clear path to equity ownership, encouraging a broader set of individuals to adopt an owner’s mentality and influence firm growth.