ACCELERATING EVOLUTIONRESULTS OF THE INVESTMENTNEWS 2014 FINANCIAL PERFORMANCE STUDY OF ADVISORY FIRMS

THE ENSEMBLE PRACTICESponsored by Pershing Adviser Solutions LLC

Key Findings

• The advisory industry is prosperous and thriving

• The top firms in the industry are growing very aggressively and taking the top clients

• Much of the growth is fueled by contributions and market performance – firms need to emphasize new business development

• Productivity in the industry is very high but the largest firms are more than twice as productive as the smaller ones

• Many firms are underinvesting in human capital and harvesting profits at the expense of the future

• Everyone is a buyer – sellers wanted

Asset Growth in the Last 5 Years

Revenue and Income Growth by Size of the Firm

The P&L Results

$500,000 $2,000,000 $5,000,000 $10,000,000

Revenue 100% 100% 100% 100%

Direct Expense

37% 36% 41% 37%

Overhead 39% 40% 36% 36%

Profit 27% 24% 23% 27%

EBOC $ $392,000 $1,129,000 $2,596,000 $5,991,000

Sources of New Assetsby Firm Performance

Revenue and AUM per Clientby Size of the Firm

Revenue per Clientby Firm Performance

How Firms Market Themselves

Why Top Firms Have The Top Clients

Astonishing Productivity

Strategic Priorities

Elusive Economies of ScaleOverhead Percentage by Size of the Firm

Under Investing in Staff?

Mergers and Acquisitionsby Size of the Firm

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