WealthManagement Magazine

FPA Studies Adviser Practice Profitability

Fee businesses have more assets, higher expenses and bigger valuations.A major study of independent financial advisory firms shows that profitability varies widely. The survey found, surprisingly, that adding producers doesn't always result in higher profits. But fee-based practices, as expected, command higher valuations (see charts).Released in August, the 2000 FPA Financial Performance and Compensation

Fee businesses have more assets, higher expenses and bigger valuations.

A major study of independent financial advisory firms shows that profitability varies widely. The survey found, surprisingly, that adding producers doesn't always result in higher profits. But fee-based practices, as expected, command higher valuations (see charts).

Released in August, the 2000 FPA Financial Performance and Compensation Study of Financial Planning Practitioners was done for Atlanta-based Financial Planning Association. Moss Adams LLP in Seattle conducted the survey. (To purchase the entire study go to www.fpanet.org.)

The study queried 703 financial planning firms, 40% of which were sole practitioners. The rest were "ensemble" firms with more than one principal or partner.

Respondents identified as high-profit practices are the top 25% of participants in terms of profitability.

TAGS: Archive
Hide comments

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Publish