Here Are Advisors' Biggest Business Challenges: Cerulli
The research group looks at where advisors struggle and how asset managers can help.
Financial advisory practices, faced with time-consuming impediments to their daily work, look for processes to become more efficient. The latest Cerulli Edge — U.S. Advisor Edition digs into the biggest challenges faced by advisors and how asset managers can address them.
Cerulli Associates’ research shows that for half of advisors, new client acquisition is the biggest challenge. Forty-one percent of advisors cite compliance and regulatory responsibilities, 26% cite building multi-generational client relationships and another 26% cite portfolio construction process optimization.
Advisors say asset managers can help alleviate these challenges in several ways:
- Sharing other advisors’ best practices: 43%
- Financial assistance for client events: 40%
- Support with advanced financial planning techniques: 36%
- Competitive product information: 31%
Nearly a quarter of advisors report that they use webinars at least monthly to obtain updates from asset managers.
In selecting an asset manager, 68% of advisors cite historical product track record, 60% cite a consistent style of investing, 56% cite a firm’s reputation, 52% cite quality of client service and 46% cite low relative expenses as the most important criteria.
“Advisors consistently share that their best partners actively work to help address the most pressing challenges practices face, whether it be through digital tools, client-facing materials or intelligence gathered by wholesalers,” Andrew Blake, senior analyst at Cerulli, said in a statement.
Cerulli recommends that asset managers fill gaps for RIAs wherever possible, for instance, by offering portfolio/model construction services whose cost can be onerous for smaller practices to implement using their own resources.
According to Cerulli, 55% of asset managers offer portfolio or model construction services to large RIAs, and another 15% plan to do so. This highly valued resource can help alleviate challenges advisors have to deal with in a move to independence.
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