Advisory Firms Report High Profits Amid Stalled Client Growth
What happened
Financial advisors are scrutinizing client portfolios as the industry reviews its scaling methods. A study based on 2025 financial information from 173 advisory firms found an average operating profit margin of 38.6%. Despite these high profits, organic growth from new clients was near historic lows.
From investmentnews.com
Why it matters
Experts suggest that firms should move beyond using Assets Under Management as a measure of scale, as AUM can rise due to market gains alone. Instead, advisors are advised to track operating profit margin, revenue per household, and revenue per team member to accurately gauge profitability.
From investmentnews.com
Who's involved
- Touchstone InvestmentsMutual fund company operating in the Cincinnati market
- CincinnatiCity in Ohio where Touchstone Investments operates
Who could feel it
Possible knock-on effectsThese are possibilities Brind reasoned out, not predictions, and not advice. Most are not stated in any report.
- Touchstone InvestmentsSpeculative
Could see changes in client demand or investment strategies if advisory firms shift their focus away from Assets Under Management
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The entities involved
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Touchstone Investments
mutual fund company
Nothing else this week.
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Cincinnati
city in Ohio, United States; county seat of Hamilton County