Earlier this year, we surveyed over 1,000 registered investment adviser (RIA) firms about their operations, technology, and advisory fees charged, and then paired it with several different firm performance metrics. Previously we discussed how our survey revealed that RIA firms that aggressively adopt technology are growing assets under management (AUM) faster relative to their peers In this next post takes a look at the data to answer the question: Do RIA firms that offer financial planning services perform better relative to firms that do not offer such services?

About 60% of the 1,023 RIA firms that participated in our recent survey disclose on their Form ADV Part 1 that the firm offers financial planning services. The chart below shows what percentage of the advisory firms that participated in the survey that were initially registered in a given year currently offer financial planning services:

The above chart indicates that a lower percentage of firms that were recently started are currently offering financial planning services compared to RIA firms started in past years. At first glance, this may seem to indicate that the offering of financial planning services is becoming less popular over time. However, the above chart is instead likely an example of survivorship bias which in this instance is the logical error of focusing on investment advisory firms that have “survived” and are still in business while overlooking firms that have gone out of business.

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