Ask 100 growth-oriented advisors, “Do you want to be more productive?” and you’ll get 100 affirmative answers. Productivity, though, isn’t just about scaling and serving more clients today, it’s about preparing for the huge rise in demand for financial advice that we’re going to experience in the coming decade. In other words: future-proofing your firm.
Over the next decade, the RIA industry will see 1) the demand for financial advice rise drastically and 2) the number of active independent advisors fall by about one-third. If current trends hold, there simply won’t be enough RIAs to handle the millions of households in need of advice. Those prospective clients may resort to seeking advice from less desirable sources.
The way to measure productivity
The simplest equation for RIA productivity is revenue divided by full-time employees. The more revenue you bring in per FTE, the more productive your firm is.
A few notes on this metric.
First, it’s a lagging indicator. And second, it’s probably slightly oversimplified. But a good starting point.
Other metrics to consider (that loosely roll up into revenue per FTE) include clients per advisor, average revenue per client, time spent on revenue-generating activities vs. administrative tasks, and tech utilization rate. You may also want to consider measuring operating margin per FTE, which is a good measure of productivity (output) and efficiency (waste, or lack thereof).
Third, the definition also lacks an important human element. Life is more than a bank statement, and for many, productivity is directly correlated to what we might call “job fulfillment.” If you own a small firm, say, and you encourage your advisors to bring in more revenue, and one of them burns out as a result, the firm is not going to be as productive. Firms striving to be more productive must also do so sustainably.
How do you achieve this?
Five ways for RIAs to boost productivity sustainably
Graduate and replace households that are no longer an ideal fit
Graduating clients who are no longer an ideal fit is one of the simplest ways for an RIA to boost productivity. These clients often introduce exceptions—custom workflows, specialized requests, or ad hoc services—that disrupt processes and slow the team down. By focusing your firm’s resources on a clearly defined niche, you make it easier to standardize and streamline critical activities like onboarding, planning, and communication. Fewer exceptions mean fewer fire drills, smoother handoffs, and more time spent executing instead of reacting.
Ideal-fit clients also amplify your impact without extra effort.
They understand your value, trust your guidance, and consistently follow advice. This leads to more focused meetings, faster follow-ups, and stronger outcomes. All without adding complexity. It also provides clarity across your firm, making delegation, automation, and growth easier. Over time, this creates room for higher-value relationships, reduces team fatigue, and turns client service into a repeatable advantage.
Hire and train support staff to free up revenue-generating headcount
The most straightforward way to boost an advisor’s efficiency is to maximize their client-facing hours. Currently, the average advisor spends only 20% of their time meeting with clients. Meanwhile, over 40% of advisor hours are spent on behind-the-scenes work like meeting prep, analysis, and managing assets.
A 2022 Kitces study found that higher advisor-to-support staff ratios led to greater revenue per employee. For example, a three-person RIA (consisting of one lead advisor and two support staff) generates four times the revenue that a solo RIA does. By adding two support resources, a solo RIA can increase revenue per employee by 33%. Data suggests that top-earning advisors who lean on support staff for time-consuming technical and admin tasks spend about 10% more time in client meetings than their peers. This strategy pays dividends, adding ~4 hours per week of client contact and nearly doubling the income for top advisors.
Improve and consolidate key technology
That could mean reevaluating your tech stack or even replacing your custodian. For Ami Shah, CEO of Steward, onboarding clients at Schwab became such a headache that she decided to switch. Upon moving to Altruist, Ami reduced her average client onboarding time from 12 hours to a single hour—a 91% reduction.
Increasing productivity shouldn’t require playing B-I-N-G-O on the Kitces FinTech map. Many firms rely on a patchwork of software solutions, each requiring separate logins, training, and integrations. Simplifying your tech stack cuts down on workflow friction, reduces costs, and increases efficiency.
Use AI thoughtfully
AI won’t replace human advisors, but it can serve an important role in your office. And it’s all but guaranteed that its role will expand over time. Today, AI tools are well equipped for repetitive, time-consuming tasks like organizing client meeting notes and drafting communications materials, as well as client acquisition strategies like content marketing and outbound prospecting.
In the next year or two, that role will become much more “agentic,” taking on another tier of tasks that were once handled by people. To stay on top of these developments, we recommend electing an “AI czar” at your firm to keep up with rapid changes in the space.
Build a sustainable talent pipeline
As noted, in the coming years, the industry will experience a material advisor shortage, with demand for financial advice outstripping the growth of new independent advisors.
Technology and support staff can help bridge some of that gap, but the financial advice industry must also work hard to attract new talent. Firms that invest in training and recruiting now will be positioned to scale in the future.
If you’re looking to recruit, colleges are a great place to start. Remember that talent can be found anywhere, and the best advisors aren’t necessarily math and finance grads. Student-athletes, for example, fit the advisor profile well—they’re used to competition, discipline, and long-term goal setting. Seek them out.
Internally, consider investing in the people already on your team. Cover certification costs, challenge junior employees to take on new tasks, and create clear career paths that encourage retention and expertise.
The future of financial advice and productivity
The successful RIAs of tomorrow will serve more households while continuing to provide the human advice that delivers great outcomes for clients. Advisors with a modern custodian by their side will be best positioned to ride the wave of demand in the next ten years. If you’re interested to learn more about how we’re supporting advisors for long-term success, please get in touch with our team.
