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The sooner you realize it’s a sales job the better off you’ll be. Market will grow your AUM 10% every year. I will grow my AUM by another 10%(ish) per year and just completed my 6th acquisition which is where you can get a huge shot in the arm. (Another 15-20% per year in acquisitions). Demographically, the business has a huge gap. You have a very large amount of advisors 55 and above and a large amount of advisors under 30. The guys in the older group are burning the younger guys out of the business. The older guys are looking around trying to monetize their books. Be prepared...have the relationships and the financing. Also, continue to grow your book the old fashion way. Get wholesalers to help you bring in speakers and pay for dinners for your clients. Do exceptional things and be memorable. Advisors are a commodity. Everyone has sweet software to pick the right stock or fund...create an experience.
The question is hard to answer as it depends on where you are now and where you are trying to be. For me it's about net new assets and new relationships. I target 5 new relationships per year and $6,000,000 of new assets. I've been doing this for 18 years and have been fortunate to build a successful practice. I'm working on streamlining my efforts even more and adding more value to my relationships. Most of my new clients come from referrals or from niche prospecting. I'm 40 years old. I started 6 weeks out of college dialing for dollars. I worked 12 hour days and weekends. My clients have become a part of my family. When I first started my manager said 7-10 million a year for 3 years or you won't make it. Most didn't. I'm still around
I always said if I could bring in 5mm new money every year I would grow a very successful business. With market growth and the majority of years ending up over 5mm, I would say it’s worked.
Well with my more mature book of business I send out about seven and a half million a year in dividends interest and rmds that people have depended on me to guide them to in their retirement years. I also turn around and bring in about 10 to 12. So I think it's a function of both. I bet a lot of newer books a business and younger a face don't have to deal with saying goodbye to seven and a half million every year.
Btw...I consider myself a medium fish...$250-350k in net. The guys I know killing it are making upper six figures or low 7s. I’m just trying to observe their playbook and duplicate it.
Most older advisors arent growing their books. Most get complacent or are content(nothing wrong with this just stating a fact). I suspect the rainmakers would be rockstars in any field. It's sales - hard work - and time. There are a lot of "big time" advisors who do nothing but sell high commission products. Wire houses recruit kids into programs have them bring their parents and parents friends money then the advisor keeps the assets when the kid quits or fails out. Build a process which you can scale your business so you maximize your time. Make 25 contacts(not calls) every day. Understand how many contacts lead to new meetings/new Clients. Do the things competitors aren't willing to do.
You need to bring 1MM per month in new investable assets
Following. I’d like to know from a middleman not so much the big fish
I really started meeting other advisors when I was studying for the CFP and taking classes about 10 years ago. I became friends with them and still get together with them to share ideas and best practices. I changed how I viewed advisors...potential partners rather than competition. My first deal was very small. It was a primarily life insurance focused advisor with about $10 million AUM and $40-50k gross. I just inked a deal in August for about $45 million in AUM with a one man shop generating about $250-260k gross. It came with a much needed assistant. It was a harder deal because he isn’t with the same BD so we’ve been running around seeing all his clients and getting them to move over.
our team (3Fa) has right at 340M in pure advisory assets. Over the last few years we are averaging about a 5% growth rate. Right at 1mm a month basically in new accounts. Add in current clients giving is additional wallet share and it would move up to around 7/8% I would guess. Our growth rate could probably be a little quicker but we have bought a few books recently. I’m not including those buyouts in the above growth rate. But onboarding those new people defiantly takes up time and takes away from new client growth.
What is everyone paying when they are buying out a book? How are you structuring the deal?
Following as well
Where are you finding the firms or individuals for your acquisitions?
250k per month or 10-25% annualized growth.