Advisors Focused More on Client Management Than on Investment Management See Double the Growth in New AUM, According to FP Transitions’® Data

OAKS, Pa., and LAKE OSWEGO, Ore., Oct. 10, 2016 (GLOBE NEWSWIRE) — Financial advisors’ time and how they spend it directly impacts the growth of their business and practice’s value, according to a report published by SEI (NASDAQ:SEIC) based on data and analysis provided by FP Transitions, an independent practice management consultancy and the leading provider of valuation, succession and acquisition solutions in the retail independent financial advisory space. On average, client managers add twice as much in assets under management (AUM) ($14.5 million) annually when compared to investment managers, who add $7.2 million in total asset growth. The research conducted by FP Transitions examines how two advisory business models compare in terms of current operations, long-term growth and potential future value through data collected over the last 10 years from more than 8,000 advisory practices.

The report analyzes the operations of “investment managers” (IM), advisors who focus principally on the investment process, and “client managers” (CM), those who delegate the investment management function to a third party and concentrate on gathering and building relationships. Despite the similarities found between the IMs’ and CMs’ practice models, including number of employees, how they are led by advisors of similar age, experience, and number of years as independent advisors and serve a comparable client demographic, the greatest disparity between the two models lies in advisors’ activities and how they devote their time.

“We’re delighted to work with SEI to provide data-driven, actionable insights to the independent financial advice industry based on the unique institutional knowledge we have accumulated over many years.  This ground-breaking study offers many valuable insights and arrives at some truly eye-opening conclusions, which should be of interest to financial advisors throughout the industry, regardless of their business model,” said Brad Bueermann, CEO of FP Transitions. “It is especially noteworthy that over the course of 10 years, through the accumulated value of new client activity, the average advisor following a business model focused on client relationships could potentially add over $1 million to the value of his or her practice, compared to the advisor focused more on investment management.”

“The research clearly shows that the most productive and profitable advisors are laser-focused on nurturing client relationships to better understand their needs,” said Raef Lee, Managing Director and Head of New Services and Strategic Partnerships, SEI Advisor Network. “Now is the time for advisors to explore strategies to help maintain their competitive edge through outsourcing, while boosting profitability and strengthening their client relationships.”

Effectiveness of Activity and Time

IM advisors report that they spend more than one-third of their time (37 percent) on investment management activities like research and client portfolio management while CMs spend less than three percent of their time on these activities, according to the data from FP Transitions.

Furthermore, CMs spend more than half their time (56 percent) on client acquisition and client management compared with IMs spending just 30 percent of their time on the same activities. With 34 percent of time saved and not spent on investment management activities, CMs spend nearly twice as much time as IMs on client meetings (37 percent and 20 percent, respectively) and prospecting new clients (12 percent and six percent, respectively). The way that advisors spend their time, whether it is focused on investment activity or clients, makes a difference in the long-run in building a more profitable business, according to the data.

The FP Transitions data also reveals that the type of activity financial advisors focus on affects their client growth and in turn, their asset growth. Although the IMs surveyed had a higher average AUM per client ($468,960) than CMs surveyed ($321,817), CMs averaged 120 more clients (285 clients) than IMs (165 clients).

The study found that advisors who focus on clients add 14 new clients per year on average for a total of $4.5 million in new assets. On the other hand, advisors that focus on investment management activities gain only four new clients per year on average for a total of $1.9 million in new assets. When looking at the new assets gained from existing clients, in addition to that of new clients and portfolio growth, the total asset growth rate in AUM was 18 percent for CMs versus only 11 percent for IMs.

Additional Analysis

Additional analysis can be found in the report, “A Data-Backed Solution to Building a More Profitable Advisory Business,” published by SEI Advisor Network and FP Transitions. In addition to data provided by FP Transitions, the report also includes analysis of proprietary data from SEI Advisor Network on the state of the industry and assessment of advisors’ own businesses. Key topics explored include:

  • Strategies and opportunities for advisors to reclaim their time;
  • Types of outsourcing services and technology that advisors rank as being effective;
  • A look at outsourcing cybersecurity/IT infrastructure, human resources and more.

To view the full SEI Advisor Network report, please visit: here.

About The SEI Advisor Network
The SEI Advisor Network provides financial advisors with turnkey wealth management services through outsourced investment strategies, administration and technology platforms, and practice management programs. It is through these services that SEI helps advisors save time, grow revenues, and differentiate themselves in the market. With a history of financial strength, stability, and transparency, the SEI Advisor Network has been serving the independent financial advisor market for more than 20 years, has over 7,000 advisors who work with SEI, and $53.7 billion in advisors’ assets under management (as of June 30, 2016). The SEI Advisor Network is a strategic business unit of SEI. For more information, visit

About SEI
SEI (NASDAQ:SEIC) is a leading global provider of investment processing, investment management, and investment operations solutions that help corporations, financial institutions, financial advisors, and ultra-high-net-worth families create and manage wealth. As of June 30, 2016, through its subsidiaries and partnerships in which the company has a significant interest, SEI manages or administers $707 billion in mutual fund and pooled or separately managed assets, including $269 billion in assets under management and $438 billion in client assets under administration. For more information, visit

About FP Transitions
Based in Lake Oswego, Oregon, FP Transitions partners with independent advisors to build businesses of enduring and transferable value, and also operates the largest open market for buying and selling independent financial advisory practices. Its team of 40 professionals are expert at analyzing and valuing the intangibles that make a financial services practice unique and valuable, and at helping advisors manage the equity they have built in their businesses over a lifetime of work. Utilizing their experience in valuing over 8,000 independent businesses, FP Transitions assists advisors in arriving at a plan of succession designed to realize value for the founder and perpetuate the business for the next generation of advisors. For more information, visit

CONTACT: SEI Media Contacts:
Dana Grosser        
+1 610-676-2459

Meredith Mitchell
Prosek Partners
+1 212-279-3115 x. 268

FP Transitions Media Contacts:
Joseph Kuo / Chris Clemens
Haven Tower Group
+1 424-652-6520 x101 or 102 or
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