It’s always interesting to look at the performance of relevant industries. While tech, marketing services, and independent management consulting are the areas of greatest activity in freelancing, there are several industries with similar dynamics. One, for example, is the wealth management professional community.
A survey by Nitrogen offers an interest perspective. Nitrogen describes itself as “the growth platform for wealth management firms.” And their survey results provide some interesting insights of value to freelance platform and marketplace leaders. After all, there are many similarities between freelancing generally and advisers recommending how clients should invest their money. They offer an advisory service as do many freelancers. They are very often independent contractors or part-time “moonlighters”. And they share many of the same goals as freelancers: financial success but also flexibility in schedule, control over their work and clients, and affiliating with other, similar, professionals.
This survey focused on differences between slow growing and hyper growth firms. A majority of respondents were financial advisors who owned their own firm (62%), followed by financial advisors that worked within a firm (38%). Slow growth was defined as firms growing less than 5% annually. Hyper-growth wealth managers increased their revenues by 20-30% or more.
Here are the findings that seemed most interesting and relevant to the freelance community:
Hyper growth firms obsess more about lead generation. For both slow growers and hyper growers, client satisfaction and retention stand out ahead of other factors. But a strong second for hyper growers is the quality of lead generation (25%). Slow growers are less emphatic about its importance (15%) and invest less in generating potential clients.
Hyper growth firms are better prepared to scale. Both slow and hyper growers see the need to establish systems that enable the firm to scale. But, hyper growth firms are more likely to take the actions and investments needed to do so: creating a standardized proposal process (20 vs 15%), curating a good match between client needs and choice of advisor (25 vs 15%) and rigorously managing advisor performance (20 vs 15%).
Hyper growth firms use more growth levers to generate leads. Slow and hyper growth firms agreed on the importance of client engagement (40% +), but hyper growth firms are more insistent on the importance of ongoing practice management improvements, smart marketing, and providing clients with additional offerings in areas like financial planning.
Hyper growth firms spend more time focused on growth. Hyper growth firms do more to drive growth, and place greater emphasis on growth. Almost 80% of hyper-growth firms say spending time on growth plans is very or extremely important, compared to 43% of slow growth firms. Among slow growers, 30% reported six or more hours spent weekly on growth while 60% of hyper growers spent an equivalent or greater time on growth plans.
Hyper growth firms out-spend and out-utilize technology than slower rivals. Hyper growth firms are “using more tech, more efficiently”. They prioritize their tech stack investments to drive client satisfaction. For example, the survey found that hyper growth firms are 1.5 X more likely than slow-growth firms to spend the largest share of their budget on front-office, client-facing technology.
Hyper growth firms put more into marketing. Hyper growth firms see marketing as a strategic activity, a source of competitive advantage, and invest significantly. They are 5X more likely than slow growth firms to spend at least 10% of gross revenue on marketing. In contrast, 75% of slow growth firms allocate just 3% or less on marketing each year.”
Hyper growth firms emphasize events and brand partnerships. For hyper growth firms, the most important marketing channels are events (45%) and brand partnerships (15%). These two together represent 60% of total spend. Slow growers distributed their marketing dollars and hours more broadly, depending more on paid ads, social media, website traffic, and content marketing (55%) and far less on events and partnerships (40%).
hyper growth firms better utilize automated client communication. Both hyper and slow growing firms rate timely client communication as important, but hyper growth companies have invested in automation to a far greater degree (30% v 15%), freeing up advisor’s time for personal interactions.
What’s the takeaway? An overall summary of the data might be as follows: Hyper growth firms create a runway for high performance, then add hustle. They are more focused on ensuring the right systems are in place to scale. They are clearer about the important levers for growth, emphasizing lead generation, market positioning, and utilizing events and brand partnerships as key growth levers. They set high and clear performance expectations. They recognize the importance of “curating” the client experience by connecting clients to the right advisor. They spend more time talking about growth, planning for growth, and evaluating current activities and future initiatives. And they invest in technology to improve the client experience first, and the firm’s productivity second.
There’s a lot to learn from the financial services industry that appear very applicable to the freelancing revolution. But, as reported at the beginning of the article, what’s clear is that top wealth management platforms show the power of fully adopting a growth mindset.
Viva la revolution!
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