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SEI Quick Poll: Independent advisors forecast a second-quarter rebound, make resolutions for the new year

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More than half (51 percent) of independent financial advisors forecast the markets will rebound by the second quarter of this year, according to a recent SEI Quick Poll, “The Year Ahead.” Undoubtedly a year that shook up the industry (to say the least) independent advisors say many themes have emerged from 2008:

  • When life gave advisors lemons, they made lemonade. When asked what made 2008 a good year, many advisors recognized positive client relationship opportunities. For example, 40 percent of advisors said that although volatile markets made clients anxious, it also created an opportunity for them to strengthen client relationships. Similarly, 28 percent of advisors stated that the past year helped clients recognize the value of their strategic personal advice versus investment-only perspective.
  • Advisors will remember the bad with the good, too. “Keep my head above water” was one advisor’s New Year’s resolution, indicating that while respondents are optimistic about the coming year, they have not forgotten the challenges of 2008. In fact, 56 percent of advisors agreed that it was the nearly 40 percent pay cut they experienced due to market depreciation that made 2008 a tough year. A number of advisors (30 percent) also stated that the need to scale back business expansion plans was their biggest gripe about the previous year.
  • Advisors still believe in growth. To replace lost revenues from 2008, 45 percent of advisors stated they would explore new initiatives to proactively acquire clients. Many advisors (24 percent) also said they would increase their efforts with center of influence contacts such as accountants and estate attorneys, while another 24 percent will strengthen existing referral processes. Only seven percent said they planned to do nothing but focus on retaining existing clients.
  • Clients aren’t as tolerant as they used to be. Advisors also believed that last year’s market conditions taught clients valuable lessons about themselves, particularly with respect to risk tolerance. Almost half of advisors polled (49 percent) felt that clients realized they weren’t as risk-tolerant as they’d thought they were, while 33 percent said clients learned they could handle volatility if they focused on long-term goals.
  • It’s all about trust. Based on what they’d learned from 2008, when asked what advice they’d give new advisors entering the business, 57 percent of advisors recommended they position themselves as a trusted advisor by “providing advice and not just investments from the onset.”

“Even in the face of the challenging conditions of 2008, advisors are determined to find ways to add value to their client relationships,” said Stephen Onofrio, senior managing director, SEI Advisor Network. “This past year was SEI’s biggest for new advisor recruitment, and we found that most advisors were focused on providing strategy that went above and beyond just investments.”

The poll included feedback from 285 independent advisors, including New Year’s resolutions about both their clients and their businesses. The top nine resolutions for 2009 included:

1. Grow referrals.
2. Conduct more marketing initiatives.
3. Hire staff.
4. Be more proactive with clients.
5. Retain existing clients.
6. Add services to practice.
7. Truly focus on clients’ needs.
8. Obtain larger clients.
9. Manage expenses better.

To obtain a copy of the complete poll and its findings, please email SEI at [email protected]