Heading into this year, financial advisors are more optimistic about the economy than their clients, according to a study by SEI released Thursday.

Thirty percent of advisors said they are "optimistic" heading into 2011, but only 3% of advisors said their clients were optimistic.

The advisor optimism is reflected in stock market projections among this group; 60% of advisors said that they expect a stock market gain of greater than 7%. Advisors are also optimistic that this year will be a better year for their businesses than 2010.

"The markets have improved and the consensus in the industry is that things

will continue to look up," said Wayne Withrow, an executive vice president and SEI Advisor Network business unit leader. "The challenge for advisors now, is how best to grow their business. As investor sentiment improves and they look for new investment solutions, advisors need to find ways to attract these individuals. It's critical that advisors have a deliberate strategy for doing this in order to grow their business."

"Across the board, investors are looking for greater clarity about their investments and a deeper understanding of their options. As advisors, that means we have to improve our communication with clients ­ both in frequency and quality," said Michael Ferman, the head of Rubin Brown Advisors of St. Louis. "The differentiator among advisors will be those who are able to meet this need of increased client communication, without sacrificing other areas of their business."

From an economic perspective, advisors are more optimistic about 2011 than they were about 2010. Market pessimism appears limited to the bond markets as 64% of advisors think there is at least a 50% probability of a "bond bubble burst."

The area of concern for advisors is the Federal deficit. Advisors are mixed on how best to solve the deficit challenge: reduce current stimulus plans (31%), revisit healthcare reform (28%), or increase the retirement age (16%).

Advisors are optimistic this year will be a better year for their business than 2010. The toughest part for last year was dealing with the below-expected revenue levels. However, advisors identified positives as well: the market uncertainty provided an opportunity to strengthen relationships, show their real value, and examine existing business processes and procedures.

To increase revenue, advisors plans to proactively acquire clients using new initiatives (32%), increase efforts with centers of influence (25%), and continue their existing referral process (21%.)

According to the survey, which polled 367 advisors in December and January, 55% said the most important aspect to growing their business is getting referrals from existing clients.

An additional measure of optimism was found in that 73% of advisors said they would recommend young professionals consider a career as a financial advisor. Despite the overall optimism, 57% said that managing business risk right now takes more time than it did during the financial collapse in 2008.

The client-advisor relationship continues to evolve as the need for more  communication increases. Seventy-seven percent cited this as the area for greatest need, far outweighing the increased need for more reporting (16%) or more research (7%).

Forty-two percent said they communicated with clients more frequently last year than they did the year before. For 2011, 41% said they plan to use in-person meetings more frequently.

Additionally, advisors continue to rely on third-party vendor information for sharing material with clients, such as investment analysis, financial planning, and other topical issues.

Advisors said that social media remains a limited tool to reach new clients - only 11% currently use this method.

Their top priorities for this year are to create better work-life balance and improve processes and procedures. When asked how a professional coach could help them, the most popular choices were new business development, marketing and public relations, and business organization and staffing.

The top three New Year's Resolutions for 2011 among advisors are: spend more time on growth activities, remember what really matters in life, and segment clients and service them differently based on profitability.

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