Increased compliance requirements, regulatory changes, and an aging client base are just some of the obstacles registered investment advisors will face this year, but advisors still see a bright future for their assets under management.

Nearly nine in 10 RIAs anticipate faster growth in assets under management this year, according to a survey by TD Ameritrade, despite the perceived headwinds.

(Read More: 12 Advisor Trends That Will Shape the Next Decade)

So is it confidence or over-confidence?


Advisors seem to have reasons for their positive outlook. According to the latest TD Ameritrade Institutional Advisor Index survey of 502 independent RIAs, 97% report total clients increased or remained steady over the past six months. Advisors surveyed say deploying technology to increase scale (63%), systematizing client service and delivery (58%), and training and developing staff skills (58%) are top strategic initiatives for growth over the next six months.

"Advisors still have a challenging environment after 2008's market disruption with continued geopolitical instability, the European debt crisis, and political gridlock in Washington—markets are still unpredictable and hard to manage," says Jim Dario, managing director of product management at TD Ameritrade Institutional. "Because of that, a lot of clients are relying on handholding from advisors."

That need for "handholding" is certainly reason for advisors to be happy.

When it comes to referrals, advisors also see a majority of growth opportunities coming from client referrals, center-of-influence referrals, and third-party referrals. To attract new clients, RIAs are considering new niche clients, adding new markets, and adding new expertise.

Looking ahead, investing in technology is also a top priority for RIAs over the year, with 63% of respondents calling it the top infrastructure investment they plan to make over the next six months.

Amid the rosy picture, however, advisors foresee an array of challenges—mostly relating to issues exterior to their practice as opposed to internal issues. Increased compliance requirements (57%), regulatory changes (56%) and an aging client base (56%) are identified as potential headwinds to long-term growth.


In response to obstacles, advisors are planning to fight back by increasing marketing and business development spending in the next six months. However, many respondents indicate that they are not considering merger and acquisition activities as part of their growth strategy. Of the few advisors that are considering M&A activities over the next six months, acquiring another firm (14%) or adding new partners or owners (13%) to their firm are identified as top strategies among RIAs.

"Without a doubt, there are critical factors putting opportunities in front of advisory firms, particularly the aging baby boomer generation with massive wealth transfers between baby boomers and Generation X," Dario asserts, noting that Gen X's control of wealth is expected to boom from $2 trillion to $28 trillion within just eight years.

"Consequently, the overall trend and need for advice is overwhelming," he says.  


While many advisors are complaining about regulations, investors say they want more protection. Results of a new survey released by the Financial Planning Coalition show that Americans are calling on the federal government to play an active role in protecting investors, including extending a fiduciary standard to broker-dealers who provide personalized investment advice to retail clients.

The study showed 80% of American investors do not believe the federal government is doing enough to protect “consumers from being taken advantage of” by financial advisors. Meanwhile, 84% of American investors agree that “financial advisors should be regulated by the federal government to protect investors and build confidence in financial services.”

Read More: 12 Advisor Trends That Will Shape the Next Decade

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