Looking ahead to the new year, 77% of financial advisors in a survey released Wednesday by Independent Advisor Solutions by SEI said they expected a market downturn over the next two years, with 33% predicting it would happen in 2019.
Asked what economic factor worried them and their clients most, 38% of respondents said a big market correction. Twenty-five percent cited geopolitical uncertainty, and 14% said a trade war.
Only 13% of advisors ranked rising interest rates as a top concern, implying that political pressures and sentiment in the U.S. were triggering such worries, according to SEI.
With economic concerns top of mind, 25% of financial advisors surveyed said attracting and retaining more high-net-worth clients was their chief goal in 2019. Twenty-three percent said first on the list was to increase client referrals, and 22% said technology workflow implementation to increase efficiencies in their practice was their top goal.
As to a large investment they would make to improve their businesses in 2019, 28% said they wanted to enhance the client experience, 25% wanted to grow their advisory team, 18% to increase the marketing budget and 17% to acquire another firm.
Mindful of their competitive position, 43% of advisors resolved to increase educational events and resources for clients in 2019. Longer term, 36% of advisors resolved to take advantage of more millennial investors seeking advice over the next one to two years.
Other resolutions included increasing digital marketing channels, building a center of influence and growing by acquiring other advisory firms.
“This year’s survey reveals that goals and resolutions align with the continued evolution toward greater demand for personalized advice and service,” John Anderson, head of practice management solutions at Independent Advisor Solutions by SEI, said in a statement. “Through a personalized financial plan, clients are more likely to understand how market events impact short-term and long-term goals.”
Anderson said that given the outlook uncovered in the survey, advisors had to be laser-focused on providing the optimal client experience and preparing their businesses to best serve their clients during volatility both in the near term and into the future.
SEI conducted the online survey from Nov. 28 to Dec. 12 among 407 independent financial advisors, representing clients and non-clients of SEI. The firm also received responses from 59 financial advisors, after conducting the survey at its National Strategic Advisor Conference in October and November.
According to the survey, 34% of financial advisors identified the increasing shift away from a product-based business model to an advice-based one as the trend that would most affect and change the financial advisory industry in the next five to 10 years.
Twenty-six percent of respondents pointed to increased regulation and compliance oversight as a key trend to watch.
SEI noted in the statement that separate research it had conducted with the Financial Planning Association showed that 63% of 253 high-net-worth investor respondents said they had found high value or very high value in an advisor who personalizes advice.
SEI said that as financial advisors’ top goal was to attract and retain more wealthy clients, the advice-based trend is consistent with what investors are looking for in advisory services.
— Check out Ron Carson Tells Why He’s Dropping His FINRA License on ThinkAdvisor.