Michael Kitces reveals marketing cost imbalance as advisory firms scale
@MichaelKitces: Kitces on advisors time costs
Michael Kitces, a prominent financial planner, highlights that the primary marketing expense for scaling financial practices is the increased opportunity cost of advisors' time.
In recent findings from Kitces Research, it is revealed that as financial advisory practices expand, advisors face a significant increase in the cost of time spent on client acquisition. Kitces points out that these costs surpass other marketing expenses like technology and overhead, as the value of advisors' time becomes increasingly precious with business growth.
Research indicates that the expansion of advisory practices necessitates more time dedicated to client acquisition due to the critical opportunity cost. Kitces emphasizes the challenge of balancing growth while managing the cost-efficiency of time, which becomes a crucial factor in the scaling process for financial advisors.
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While the increasing opportunity cost of advisor time remains a pivotal factor in scaling financial practices, its impact is further complicated by challenges such as maintaining cultural alignment during firm transitions—a dynamic Michael Kitces explored in the context of post-acquisition integration. Additionally, shifting strategies around advisor subscription fees underscore the evolving methods firms deploy to manage growth and client relationships, highlighting the intricate balance between operational efficiency and innovative revenue models.
In the previous news, tweet author Michael Kitces discussed the challenges faced by financial advisors in adapting to market shifts.
