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Advisors’ Top Priority? Growth Trumps Tech, Scottrade Survey Finds

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Many people fantasize about what they would buy or do if they won the lottery, with varying wishes, but if advisors suddenly had more to spend, they would dedicate that capital to first growing their firms, followed by investing in technology, in human capital or in client service.

Those were the key findings of the 2015 Scottrade Advisor Services Study released today, which in August surveyed 373 RIAs online with at least $10 million in assets under management, asking where they would spend an “extra dollar” in their businesses. “Growth” was chosen by 38% of respondents and investing in technology by 25%, followed by 13% who would invest in their firms’ human capital and 12% on client services. Compliance came in last place among respondents, with only 4% saying they’d spend more on compliance/regulation.

“Growth is number one for all” respondents in the survey, said Brian Stimpfl, senior vice president and head of Scottrade Advisor Services. “That’s where they want to spend their next dollar.” That was the case “far and away for state-registered” advisors, at 45%, Stimpfl pointed out, though growth was the top priority even among respondents with more than $500 million in assets, at 31%.

While growth could mean different things to different advisors — not just AUM — Stimpfl said achieving growth requires that firms set up a process for their new client pipeline, which could include simple steps like holding a weekly sales meeting at the firm. “Growth is more than bringing assets into the business, it’s the willingness to constantly examine how you do things and embrace the opportunity to change,” Stimpfl said.

Then why don’t advisors start with improving their technology, like their CRM systems? The path to growth, Stimpfl said, should “never start with technology,” but rather with “people, then process” and only then implementing technology to help a firm’s people efficiently follow the process to achieve the firm’s goals, like growth. A focus on technology out of that context, he warned, “can be arms-race-ish.”

The advisors surveyed seemed nonplussed by the rise of digital advice platforms, or robo-advisors. When asked how they view robo-advisors, 40% of respondents said robos would complement their business, 23% viewed them as competition, 20% said robos were irrelevant to their business and 18% said they didn’t yet know how robos would affect their firms.

Growth Seen at Scottrade Custodian Unit

Stimpfl, the former TD Ameritrade and ActiFi executive, joined Scottrade last year and was recently named to head the Advisor Services division, for which “there is a super-commitment” at Scottrade, he said, reflected in a big jump in the division’s staffing: 30% in 2014, Stimpfl said, and an additional 10%-15% this year. Scottrade itself has 3,500 employees and 500 branches.

Stimpfl said that while Advisor Services’ “legacy is state-registered,” Scottrade has also seen a shift to larger RIAs choosing to custody with the firm. “We have $1 billion clients and $10 million clients,” growth in overall assets has been strong and “we have an aggressive” growth agenda of its own, designed to build up “our platform through [our] advisors’ growth,” Stimpfl said. “Our crown jewel is superior service excellence,” Stimpfl said, pointing out that in Scottrade’s corporate offices, “we have a big trophy case with 10 JD Power awards.”

However, Stimpfl suggested Scottrade isn’t interested in unbridled growth. “We want to make sure our service matches what we offer,” playing to the firm’s strengths. To meet advisors’ expressed needs to focus on growth, Scottrade has held multiple daylong workshops across the country over the past year facilitated by ActiFi to give its advisors the tools to build a repeatable process for adding clients and gaining a larger share of wallet of existing clients.

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