Despite the fact investors are more conservative after getting slammed by the recession, advisers and their clients are optimistic about the year ahead, with advisers looking to grow their business and improve their use of technology.
An SEI Advisor Network poll reveals that over half of investors have moved back into the markets, although risk and avoidance are now the overarching priorities. Forty-five percent of advisers polled said clients are “not as risk tolerant as originally thought,” while 29% said clients learned they “can handle market volatility if they focus on long-term goals.”
The majority of advisers communicated with clients more frequently last year, according to the poll, which surveyed 442 advisers this month and last month.
“This poll shows the true impact of the financial crisis that started in 2008. Advisers are looking for new ways to make their business more secure and more successful,” said Stephen Onofrio, head of sales and service, SEI Advisor Network. “Advisers that identify and implement best-practices in processes, procedures and technology will win the race for investor confidence and grow assets.”
Fifty nine percent of advisers said the most challenging part of 2009 was the “continued pay cut due to market depreciation,” while 29% said scaling back expansion plans was the hardest part. Seventy three percent said managing business risk now takes more time and for 67%, regulatory compliance has become a key priority.
For this year, most advisers hope to become more client-focused, grow their book of business and improve technology. Seventy percent of advisers predict a 0% to 10% gain in performance for a diversified 60% equity and 40% bond portfolio.
“The market has become more fluid and transactional, with a more restrictive compliance environment, making the use of technology and systems a critical component to delivering and implementing the final product with a streamlined process,” said Mitch Walk, president of Asset Management Partners of Longwood, Fla.