Firing On All Cylinders: Fueling Growth with Benchmark Insights John Hill, CFP Chief Executive Officer

2014 Fidelity RIA Benchmarking Study Over 85% of RIAs in The 2014 Fidelity RIA Benchmarking Study (the “study”) cited growth as being highly important to their firms, with 87% of their focus on organic growth.

Study Sample

Study Findings A majority of firms reported a clear desire to improve their marketing and business development activities, and to be more disciplined in their approach to growth.

Focus on growth Recognize weaknesses Lack roadmaps Key Study Findings Focus on growth Recognize weaknesses Lack roadmaps

Need better firm stories May be showing improved client mix Key Findings Need better firm stories May be showing improved client mix Need enhanced referral processes

Miss feedback opportunities Have new marketing channels to explore Key Findings Miss feedback opportunities Have new marketing channels to explore Can learn from High-Performing Firms

Lessons from High-Performing Firms   First Criterion Pass eligibility screen Practice established prior to December 31, 2010 Assets under management (AUM) of $50 million or more as of December 31, 2010 Two or more full-time equivalents (FTEs) as of December 31, 2013 Not more than 25% of new 2011–2013 AUM generated from M&A activity in any year Second Criterion Rank in the top 25% of eligible survey respondents, based on a composite ranking across three areas Three-year AUM compound annual growth rate (CAGR) as of December 31, 2013 Earnings before owners’ compensation (EBOC) margin for the calendar year ending December 31, 2013 Revenue per FTE for the calendar year ending December 31, 2013

High Performing Firm Significantly Outperform Their Peers   SOURCES OF 2010–2013 AUM CHANGE (MEAN) HIGH- PERFORMI NG FIRMS ALL OTHER ELIGIB LE FIRMS DIFFERENCE New Assets from Existing Clients 6.5% 5.4% +1.0% Assets Withdrawn by Existing Clients –3.0% –4.4% +1.4% New Assets from New Clients 9.9% 7.9% +2.0% Assets Withdrawn by Departing Clients –1.8% –3.8% Net Asset Change from M&A 0.5% 0.1% +0.4% Market Performance 8.4% 7.1% +1.3% Total 3-year CAGR (2010–2013) 20% 12% +8%

High-Performing Firms are more likely to: Tell their firm story consistently. Communicate their target client profiles. Establish stronger COI referral processes. Close business faster. Manage talent proactively, and hire selectively. Drive incremental growth in a balanced fashion.

Improve the Firm’s Marketing Efforts Top Strategic Initiatives 75% Improve the firm’s marketing and business development efforts 47% Invest in new or existing technology 40% Improve strategic business planning and execution 38% Improve client satisfaction 32% Develop or enhance a succession plan

Marketing and Business Development Framework CLIENTS CENTERS OF INFLUENCE PROSPECTS PLAN You have a disciplined process and plan in place. STORY Your story is consistent and differentiates your practice. RELATIONSHIP QUALITY You “know“ your relationships and build promoters. COMMUNICATIONS PROGRAM You create awareness through proactive programs. Adapted from Building an Action Plan to Drive Growth within Your Practice: A Business Development and Marketing Planning Toolkit. Fidelity Investments

Actions to Consider Track where all new business comes from, especially referrals. Survey your clients to help understand their experiences with your firm, their willingness to make referrals, and their referral history. Make it easier for clients to spread the word about your firm. Train associates on best practices in driving referrals. Hone your COI messaging and materials to demonstrate your commitment to shared success.

Other Benchmark Samples Growth and Income Medians for Standout Firms vs. Others, 2014