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The research behind why business development is so crucial to your firm's success

Matt Sirinides | InvestmentNews, June 2016

Summary: Research from InvestmentNews' annual benchmarking study shows that business development – a term for the formal prospecting and client acquisition process – becomes a necessary source of growth for independent advisory firms as they scale.

The largest firms generated 4.8% AUM growth – nearly 2/3 of their new business overall – from firm business development. Solo advisers and the smallest multi-professional firms, on the other hand, generated about 2/3 of their new business from referrals. If firms are either interested in growing their businesses into larger organizations, or simply reporting profitability rates among the top quartile of their peers, it is clear that growth must come dynamically and evolve past the passive referral process.”