The 2 Most Important Business Growth Metrics for Advisors

Regardless of whether you work independently or are a part of a large firm, every advisor has the same goal: to substantially grow their business. In order to monitor how your business is doing, there are two main business growth metrics for advisors to be wary of: growth rate and retention rate.

“For a firm to grow it matters not only what comes in, but also how much revenue is retained.” – Nerd’s Eye View

Growth Rate

The growth of an advisory business can be divided into two different categories: revenue from new clients, and revenue from existing clients:

  • New revenue from new clients: Revenue coming directly from newly onboarded clients who are contributing new net dollars.
  • New revenue from existing clients: Revenue brought in from current clients who hire you for additional products or services, or add assets under management (AUM) to their managed account.

Your growth rate directly correlates with how you’re doing with prospecting and bringing in referrals. As an advisor, it can be hard to make time for activities pertaining to business growth, but the more time you delegate toward income-generating tasks, the more likely you are to yield a higher growth rate year over year.

Retention Rates

Retaining clients is just as important as bringing in new prospects. This is because your retained clients bring in revenue types that are recurring in nature such as ongoing trails, retainers fees, and AUM, in addition to the percentage of clients retained every year.

Retention rate plays a vital role in helping you gauge how you’re doing not only financially, but also operationally. It’s no secret that clients are an advisor’s biggest asset. Without them, we wouldn’t have any income. In order to have a healthy, happy business, your clients need to be happy with the services provided to them. Crafting meaningful relationships with your clients takes a lot of hard work and dedication, but the retained business you get from their loyalty makes the long hours worth it.

At Benjamin, we’ve created a product specifically for advisors to help your business grow year after year. From seamlessly onboarding new clients, to effectively communicating with your current client base, our technology easily integrates into your daily practices. We would love to give you a free demo of what it has to offer. If you’re interested in seeing how this technology will change the game for you, reach out to us here and we’ll get you started right away.

man pointing to paper on desk showing business growth metrics