A survey of the US registered investment advisor sector shows that in 2013, there was a clear gap between the top-quarter RIA firms and the broader market in terms of profit, revenue and productivity.

High-performing registered investment advisor firms chalk up 50 per cent more revenue growth and productivity, and 30 per cent more profits, than many of their peers, according to a survey on sector results by Fidelity Institutional Wealth Services.

In a 2013 benchmarking survey on the industry, the firm regards as “high-performing” those businesses that come in the top quarter, or 25 per cent, of eligible businesses demonstrating clear excellence in growth, productivity and profits.

(To be considered eligible, firms had to meet the following criteria: The firm was established prior to December 31, 2009, 2) they had assets under management of $50 million or more as of December 31, 2009, 3) they had two or more full-time employees as of December 31, 2012, and 4) their merger or acquisition activities contributed no more than 25 per cent of the change in AuM between 2010–2012.)

The results highlight a clear gap between the best firms and much of the rest of the RIA industry undergoing continued regulatory change and pressures to compete in an often-tough market environment. The study also looked at views about technology – and how the best-in-class businesses think about tech priorities.

“High-performing firms are growing faster and smarter than other firms, reporting a growth rate that is 50 per cent higher than that of all other eligible firms,” said David Canter, executive vice president and head of practice management and consulting, Fidelity Institutional Wealth Services.

“In addition to attracting and retaining more of the right clients, high-performing firms are focusing on more effectively harnessing the technology they have instead of chasing the very latest innovations,” he said.

-- Some 74 per cent of high performing firms described their technology environment as strong, not cutting-edge;

-- While they recognize the importance of investing in technology – it is a strategic priority for 47 per cent of high-performing firms, as compared to only 34 per cent of all other eligible firms – only 12 per cent of HPFs invest in the “latest and greatest” technology;

-- Some 67 per cent of HPFs ranked integrating existing systems  in their top three opportunities.

HPFs are also more likely than their peers to say disruption to their business is the biggest challenge in integrating systems; HPFs are also more likely to say that improving clients’ experience is a top technology goal (77 per cent against 61 per cent).

“When it comes to smart technology adoption, it’s no longer just about improving efficiency. RIA firms need to stop and ask – is this helping me grow my business? Does this enhance my clients’ experience?” said Canter.