6 Pointers for Growing Your Advisory Firm From Duran, Penney & Clarke

But technology must must integrate seamlessly with service delivery, like the way Amazon and Netflix operate, so consumers know what they're getting, said Duran. "The consumer has to be at the center." He suggested that firms check the growth of revenue per employee. To check if they're investing enough in technology.

3. Take Advantage of Huge Demographic Shifts

Consult on business succession and transition of your clients, said Clarke. Baby boomers who own a family businesses could have a "liquidation event" to fund their retirement, which is a "huge demographic opportunity. Boomers have all the money."

But don't forget the Gen Xers, Duran said. They are "the most influential and underrated generation" and they will eventually get the money.

4. Check Staffing Levels

Staffing costs are the biggest item on advisor P&Ls, and 90% "of the RIAs we meet are overstaffed," said Penney. Also, "make sure to have right staff," said Clarke.

Penney suggested that firms consider adding a chief of staff to help develop talent for their firm and deal with administrative operations.

He also recommended that firms adopt a business model that's tied to revenue. Then, as the firm grows, it will a have sense of whether to add staff or tech, or open another office. "This can help move you from a world-class advisor to world-class CEO."

5. Grow Organically and Inorganically

There are 700 RIA firms with $1 billion or more in assets under management, and they're winning disproportionately more business, said Penney.  "Have people dedicated to both means of growth. The best firms do."

When considering an M&A deal, "Incorporate integration costs into the costs," said Duran.  noting that the failure to do so will likely mean the deal is much more expensive than you think.

Also, "If you think you're getting an interesting deal, I promise you it's expensive. Be realistic about actual economics."

6. Disrupt Your Own Business and Ask the Hard Questions

Firms that are willing to disrupt their own models by leveraging technologies and tools will improve their margins and drive profitability, said Clarke. "If you're not willing to change, you're at risk."

"Ask yourself what if I'm wrong? What could you do differently?" said Duran, noting that sacred cows could be holding you back from being all you can be. He noted that every 18 months his firm asks "how can we beat United Capital?"

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