how we can help > insights & research2023 Herbers & Company Service Market Growth Study
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At Herbers & Co., our comprehensive management consulting approach offers you a unified, integrated solution that addresses all aspects of your business needs.
√ People & Pay
√ Client Experience
√ Sales & Marketing
√ Leadership Development
√ Organic Growth
√ Succession & Liquidity
What service propels advisory firm organic growth? Holistic Service Models.
Are financial advisory firms growing faster if they offer custom portfolios? Or are firms who’re offering tax planning the fastest growers? Or is it a combination of services, such as estate planning and early retirement planning? We now know the answers.
Are financial advisory firms giving consumers the services they truly want, and if so, how does that impact growth?
To answer that vitally important question, Herbers & Company commissioned two major surveys, one of consumers and another of financial advisory firms. The results form the basis of the 2023 Herbers & Company Service Market Growth Study, and we are pleased to share them.
Because the results are so comprehensive—nearly 1,600 consumers and more than 700 firms were surveyed, yielding more than 300 data points—we will present the material in multiple formats, all available here.
In addition to the introductory overview of the study that you’re now reading, we have posted below the most important data points gathered from the study. And in the coming months we will publish a series of articles interpreting key findings and their implications for advisory firms.
how we can help > insights & researchTop 5 Noteworthy Data Points
#1: Tax planning highest demanded service from consumers.
Tax planning and retirement planning are the most in-demand services among financial consumers. Tax planning was the most demanded service among consumers with more than $250,000 in household assets. While 73% of the financial advisory firms we surveyed offer tax planning, just 67% reported offering retirement planning.
#2: Firms have prospect to client conversion disparities
The average advisory firm is struggling to convert prospects to clients. While the top organic growing advisory firms disclosed that they close seven of 10 prospects, that number is just three of 10 for average firms. Those firms that offer life planning, an area involving the psychology of money, convert prospects to clients at just a 10% clip. Firms that acquired at least one other firm in 2022 had a below-average conversion rate of 22%. Just 5% of surveyed firms acquired another business last year.
#3: Traditional Investment Management, Crypto, & Alternatives
Only 1 in 2 consumers wanted traditional investment management help. Consumers with more than $250,000 of investable assets want help with alternative investing options (39%) and crypto investing (10%). But none of the surveyed financial advice firms reported that they offer help with crypto investing. Meanwhile, 33% of all advisory firms reported that they offer help with alternative investments.
#4: The Client Experience Conundrum.
The top organic-growing firms diverged from others in self-evaluating their client experience. Sixty-three percent described their client experience as below average, while 36% of all other firms assessed their client experience as above average.
#5: Misalignment on the definition of ‘comprehensive’ advise.
Although 77% of firms self-identified as comprehensive wealth managers, only 31% were offering comprehensive wealth management services. The top organic-growing firms offered more comprehensive services than all other advisory firms.
About the study
The 2023 Herbers & Company Service Market Growth Study consists of two surveys conducted in 2023: a consumer survey and a financial advisory firm survey. Our goal was to determine whether the services consumers demanded were aligned with those that advisors offer. In the cases where they were, we sought to understand whether firms grew faster than average.
The consumer study elicited 1,598 valid responses, while the financial advisory firm study generated 724 responses. The consumer data was collected through a reputable data service that Herbers & Company paid per response to ensure an even balance of respondents across gender, age and income. The advisory firm data was collected using the mailing lists of Herbers & Company, technology vendors and media outlets that serve independent financial advisors. The study was not sponsored by or affiliated with a larger organization, vendor, or media company.
