With their client rosters and assets growing, independent RIAs are staffing up, and many are adding women to their employee ranks, according to latest Advisor Index Survey released Tuesday by TD Ameritrade Institutional.
Some 40% of 502 advisors in the quarterly survey said they were considering adding staff in the next six months, and a quarter of those said they would hire a female advisor to help attract and retain female clients.
Nine in 10 advisors surveyed reported that the total number of their clients had increased or remained steady over the past year. They reported an average annual revenue growth rate of 15%.
Respondents indicated that 57% of new client assets continued to come from full-commission firms, up slightly from 55% in the 2011 survey. In a telephone interview with AdvisorOne, George Tamer, director of strategic relationships at TD Ameritrade Institutional, attributed this to investors becoming better educated, and realizing that RIAs’ interest is aligned with their own.
Tamer said that in his discussions with RIA firms, he had identified two factors that explained the uptick in hiring. Large firms in particular, but also small and midsize ones, are preparing for growth they expect in the next six months, and are keen to grab market share from wirehouses.
As well, firms that have grown since the onset of the financial crisis are hiring to ensure they are adequately staffed.
Notably, about 80% of advisors in the survey reported no turnover in their offices in the past year.
Tamer said that in a historically male-dominated industry, RIA firms are tuning into demographic trends suggesting that enormous amounts of assets will flow to women in coming decades, and widowed and divorced women will likely change advisors.
He said this dictates that RIAs demonstrate to potential female clients that they understand their needs by bolstering the ranks of female advisors in their offices.
Other findings in the survey:
- Top human resources challenges advisors face today: hiring (22%), firing (18%), developing (12%) and training staff (12%).
- Compared with 2011, more advisors reported increased spending on human capital efforts, including professional development (43%), staffing (40%) and salaries and bonuses (50%).
- Over all, 87% of advisors viewed themselves as good people managers, and 90% also believed their employees would rate them as a good manager. But 82% spent less than five hours on managing staff and human resources-related tasks.
- Advisors recognized they could improve organization (30%), empower employees (25%) and work on communication skills (16%) to be a better manager.
- Sixty-nine percent of advisors reported they had a current employee manual, and 56% had formal, written job descriptions for each role in their office.
- However, only one-third of RIAs outlined a career path for new employees. They most commonly leaned on their peers (52%), benchmarking studies (32%) and industry white papers (32%) for guidance on human resources tools and management in their offices.