Most financial advisors expect their businesses to grow in 2011 at a brisk pace, according to the latest Financial Professional Outlook(FPO) survey sponsored by Russell Investments and released Wednesday.
Of the 800-plus advisors surveyed in the quarterly poll, nearly a third (31%) predict revenue growth of 10-14% in this year and almost half (44%) expect to see revenue growth of 15% or more.
“The latest survey results convey a renewed sense of confidence and optimism amongst advisors, about not only the capital markets but also their own businesses,” said Kevin Bishopp, director of practice management for Russell’s private-client services business, in a press release.
“While the global economic recovery continues slowly, investor panic has largely subsided,” Bishopp explained, “and advisors are now able to shift their focus back to meaningful long-term planning and wealth accumulation instead of triaging client concerns and addressing their anxieties.”
The majority of advisors (86%) are optimistic about the capital markets over the next three years, up from 59% in December 2010, and 36% feel their clients are optimistic about the capital markets in the coming years vs. 7% last quarter.
(A video-based discussion of the latest poll is now available online, according to Russell.)
When asked for the reasons behind their anticipated business growth, 72% of respondents said new client acquisitions are a key contributing factor. Of the advisors expecting revenue growth of at least 15% this year, 88% said new client acquisitions are the primary growth driver.
Nearly half of the advisors surveyed (49%) believe generating more revenue from existing clients will drive revenue growth, and 40% cite market appreciation as a key component.
Bishopp cautions against such heavy emphasis on conventional wisdom supporting new client acquisition as a primary driver of growth. “Russell encourages advisors to focus efforts internally first to drive significant results for clients and in turn build client satisfaction,” he said in a statement.
“Doing this can have a multiplier effect. Not only can you grow revenue from your existing client base, but you can also make clients your most influential advocates and in turn sources of quality referrals,” he added.