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Industry Spotlight > Broker Dealers

Top Trends Shaping Advice Industry: Fidelity

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The commoditization of investment management and the fee compression that comes along with that constitute the number one issue that will impact advisory firms this year, according to a new survey from Fidelity Clearing and Custody Solutions.

Altogether, 450 advisors participated in the blind online survey, which didn’t identify Fidelity  — advisors from banks, broker-dealers (independent, regional and national) insurance companies and RIAs. The findings were weighted to reflect the industry composition.

The commoditization of investment management replaces the rising cost of doing business as the top trend for advisory firms this year.  Rising costs dropped down to third place, where commoditization of asset management placed last year.

(Related: Fidelity Redefines the Future Value Proposition for Advisors)

Rounding out the top trends were an aging client base — the number two concern this year and last — growing interest in low-cost products and growing investor preference for greater transparency and/or fiduciary status. That was the fourth rated trend last year.

Advisors are deploying multiple strategies to address these trends, including offering lower cost products for portfolios, re-evaluating their pricing strategy and current product and service offerings and improving how they communicate their value proposition to clients.

(Related: RIAs Cut Fees as Growth Shrinks: Fidelity Study)

To address their aging client base, advisors are actively pursuing younger clients and offering holistic planning services, and to offset the rising cost of doing business they are segmenting their client base and automating work flows.

Improving their techniques to build long-lasting relationships with clients and their heirs is also seen as crucial for advisors this year.

The survey noted that the Labor Department’s fiduciary rule, robo-advisors and volatility remain top of mind for advisors, although the fiduciary rule is seen as having a far smaller impact this year than last, when it was first instituted, as full implementation has been delayed.

Fidelity Clearing and Custody has $1.9 trillion in assets under administration serving more than 6 million accounts among more than 3,800 clients.


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