RIAs expect to build on the “robust” growth they experienced in 2015 — in both assets under management and new clients — despite what they believe will be a slow first half for the markets in 2016. The latest TD Ameritrade Institutional RIA Sentiment Survey found that “after realizing robust growth” last year, 79% of those surveyed project further AUM growth this year, by an average of 17%. In 2015, 63% of those surveyed reported increases in the number of clients served, with half reporting higher revenue by an average of 14%.
When asked what their top marketing or growth strategies would be this year, 53% of RIAs said they will target new client niches this year, while 47% said they expect to increase their marketing and advertising budgets.
The survey of 302 RIAs (not all of whom custody with TDAI) was conducted via phone by MaritzCX between Nov. 23 and Dec. 11, 2015; the average AUM of those surveyed was $265 million. (The Fed announced a rate hike on Dec. 16.)
As for their views on the markets and investing, 59% said they expect the stock market to either be flat or decline in the first half of 2016, compared with only 40% who were bearish on stocks in the 2015 advisor sentiment survey. They are a bit more optimistic on the U.S. economy in the first six months of 2016: 46% said their outlooks for that period were either somewhat or very optimistic; 33% were neutral.
The Federal Reserve’s expected interest rate increases were cited by 84% of participants as the top “headline” that advisors will be watching that will affect client portfolios, followed by “muted” U.S. corporate earnings growth (81%), U.S. unemployment/job growth (77%) and China’s economic slowdown (75%).
But advisors aren’t waiting for additional Fed shoes to drop before adjusting client portfolios: 79% of those surveyed said they had already adjusted their portfolios to accommodate a rising interest-rate environment.
When asked in which technology areas they expect to invest this year to foster firm growth, cybersecurity came in first, with 56%, followed by CRM software at 42%, and 41% saying they expected to invest in “client-facing tools,” a category that includes websites and social media.
Commenting on the findings, TDAI President Tom Nally suggested in a statement that RIAs “should keep doing what they do best: deliver objective, comprehensive, personalized advice to clients. We also expect advisors will continue investing in technology that can help them scale and streamline low-value activities, so that they can bring even more value to clients by strengthening relationships and enhancing service.”
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