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Industry Spotlight > RIAs

Survey: RIA firms chart strong growth

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Ninety percent of independent registered investment advisors say they’ve seen increased growth or no change in the number of new clients during the past six months, according to a TD Ameritrade Institutional study. Findings, which were released last week, also indicate half of new assets at RIAs are coming from wirehouses and broker/dealers.

According to the study, research shows consumers continue to trust and increasingly turn to RIAs in a difficult market. Sixty percent of respondents said they’ve seen an increase in total number of clients during the past six months.

“This survey shows RIA firms have solidified themselves as the model of the future in this difficult market,” said Tom Bradley, president, TD Ameritrade Institutional in a statement. “Advisors are moving full-speed ahead as the independent model gains in popularity with clients.”

When asked about assets leaving their firm, nearly half of RIAs reported losing assets to known sources including other RIAs (20 percent) and banks (15 percent). Few respondents reported losing assets to either broker/dealers (8 percent) or wirehouses (3 percent).

“Not only are RIAs seeing strong client growth, current clients remain loyal. That’s a good sign the marketplace is primed for success over the long-term,” Bradley said.

Additional findings include:

  • When factoring in the current economic climate, RIAs reported the top five concerns for their practice over the next twelve months are business growth (26 percent), the macro-economic environment (24 percent), managing risk (18 percent), regulatory changes (9 percent) and marketing and operational efficiency, which tied at 6 percent.
  • Despite strong headwinds, respondents say they are maintaining their current business strategy (43 percent). Others are looking to increase revenues (42 percent). Respondents also say to increase revenues they will increase their marketing efforts (46 percent) and expand into new markets (32 percent).
  • According to the survey, one in ten firms is looking to reduce expenses. Reducing the owner/principal’s compensation (42 percent) and outsourcing back office activities (22 percent) topped the list of ways these RIA firms will look to cut costs in the next 12 months.