Lately lifestyle firms are gaining more popularity with advantages like more loyal clientele, higher quality of standards and stronger cash flows.
In a study conducted by SEI Advisor Network it is found 53 percent of the firms enjoy profit margin of over 31 percent and revenue is more than one million dollars for 55 percent of the mature lifestyle firms.
Earlier, lifestyle advisers were linked with negative undertones having pressures to grow revenue along with adding valuation. Such scenario has pushed many of them down the enterprise road.
What lifestyle firms should do
The top most challenge for lifestyle practitioners is preparing for succession. They look for survival beyond their careers.
There are four things to remember while practicing and those are people, value proposition, investment philosophy and technology.
The first and foremost is to ensure the staff is well trained and well compensated too. If key employee leaves, it will be difficult for the company to go back and start again. This is the reason many firms offer incentive-based compensation to the staff.
Next to it is finding a niche. It is critical and also important. If your approach is generic, you may risk being replicated. If your approach is more narrow, people will tend more to reach you.
Investments should be model-based believing it would maximize efficiency and profit as well. Too many one-offs may drain the business in terms of profit and time.
Use technology to save time and money. It will also strengthen your brand. You can also outsource the internal technology to cut more on spending.
What comes first
The biggest question asked is how to maximize your potential. Ask yourself whether you like people management or client management aspect. You will get the right answer.
An expert says there is no wrong doing for optimizing a lifestyle practice. Set your own unique goals and skillset.
Advisers often are challenged by facing their own inertia.
It is common to think that your brands are different from your competitors, but experts say one should think deeper about branding and thereafter double-down on the incentives.
Every business has advantages and disadvantages. The ratio may differ from one to another. This does not mean grasses on the other side of the river are greener. Lifestyle firms have their own limitations, but they are also blessed with some good features. It is suggested to focus more on the strengths rather than to think and rethink over the negative aspects.
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