Independent RIAs expect growth in 2016News added by Benefits Pro on January 14, 2016

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Joined: September 07, 2011

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By Marlene Y. Satter

Market turbulence and interest rate increases notwithstanding, independent registered investment advisors are expecting continued growth in the year to come.

That’s according to the latest TD Ameritrade Institutional RIA Sentiment Survey, which found that half of respondents expect that their firms will grow even more quickly this year than last.

In fact, they’re predicting an average growth of assets under management of 17 percent — in 2015, AUM grew by an average of 15 percent for the 53 percent of firms that reported an increase.

They’re getting new clients from a range of sources, too.

Advisors with more than $250 million in AUM say that 47 percent of new clients are from other RIAs.

The majority (53 percent) are pursuing niche marketing to stimulate growth, and while they’re boosting advertising and marketing spending (47 percent), they’re also seeking out new markets (31 percent) and adding new expertise (28 percent).

Improving efficiency is at the top of most (82 percent) RIAs’ lists as a means of helping their firms grow, while 75 percent will be looking at enhancing client service and delivery and 56 percent planning to invest in technology.

Compliance, interestingly, at 41 percent, falls behind implementation of a formal marketing/social media plan, at 45 percent.

They’re not terribly worried about the regulatory environment, either, despite all the uproar over the DOL fiduciary rule.

Instead, they expect the macroeconomic environment to exert the most influence over firms during the year, with generational wealth transfer the largest competitive threat.

Robo-advisors? A non-issue, with 14 percent of firms launching their own versions to bring in new clients. Of that group, 84 percent expect to have their own robo-advisors up and running by the end of the year.

So what are they most concerned about?

Rising interest rates, with 79 percent having already adjusted client allocations, in general by moving out of bonds and other rate-sensitive investments. The percentage of RIAs expecting the stock market to continue to rise has dropped considerably from last year’s 60 percent to just 41 percent.

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