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RIA sentiment survey client growth
After strong gains in revenue, client growth and AUM over the last six months of 2017, RIAs say they’re feeling confident about the economic outlook and plan to capitalize on recent growth, according to a survey from TD Ameritrade Institutional.

Nearly nine out of 10 RIAs surveyed netted new client assets in the past six months and almost half expect AUM to grow at an even faster rate in 2018. They also reported double-digit growth in both revenue (15%) and new clients (16%) over the same period.

“RIAs saw pretty healthy revenue growth and are feeling optimistic that the trend will continue,” says Vanessa Oligino, TD Ameritrade's director of business performance solutions. “All indications point to a strong beginning to the year.”

There's confidence about future stock gains, according to the RIAs surveyed. Forty-six percent expect equities will continue to rise in 2018 and 70% expressed optimism in the U.S. and global economies at large.

“Looking ahead, RIAs generally like what they see — for their clients and for themselves,” Oligino says.

What’s keeping RIAs up at night? Regulations and a lack of consumer awareness about fiduciaries are top competitive threats, they say.

“Regulation, in general, is always hovering in the back of any advisor’s mind,” Oligino says, adding that educating clients about being a fiduciary is also a top priority. “In the past, clients stumbled on RIAs by mistake or through referrals, but there has been a concerted effort to grow awareness around what it means to be a fiduciary.”

To sustain new growth, RIAs are looking to invest in marketing and hiring in the new year, according to the survey.

“RIAs naturally want to sustain their recent success, but they can’t just sit back and expect tailwinds to propel their growth,” says Oligino. “Though the competitive landscape has never been more heated, we see many independent advisors doing what's needed to help their long-term future.”

The survey polled 300 RIAs, overseeing an average of $161 million in client assets in November and December.
RIA sentiment survey client growth
Rosy outlook
Advisor optimism was likely bolstered by significant gains in both revenue and new clients in the second half of last year.

Firms saw a 15% growth rate in revenue and a 16% growth rate in new clients in the past six months. Fewer than 5% of respondents reported decreases.
RIA sentiment survey client pipeline
Poaching full-commission brokers
With the highly publicized fiduciary rule now delayed, clients may be voluntarily choosing to work with advisors that have their best interests in mind, the survey suggests.

Thirty-four percent of new clients are coming from full-commission brokerage firms — up three percentage points from 2017.
RIA sentiment survey AUM
Accelerating AUM growth
After seeing assets grow 16% in the past six months, advisors are thinking AUM will grow even faster in 2018.

Seventy-eight percent of respondents expect their firm’s AUM to rise in 2018 and nearly half say assets will grow faster than they did in 2017.
RIA sentiment survey stock bonds
Stocks on the move
About half of all RIAs surveyed think equities still have room for growth.

Roughly the same amount believes bonds will decline given the current interest rate climate, according to the survey.
RIA sentiment survey increase spending
Largest increases in spending
Growth takes investment, and RIAs are committing resources to developing their firms, according to the survey. In 2017, technology, as well as legal and compliance matters, dominated firm spending.

“RIAs have always focused on technology to shore up their infrastructure and make their businesses more efficient,” Oligino says. “More recently, advisors are investing in client-facing technology like leveraging client portals or creating seamless online account opening processes. The goal is to provide clients with real-time access.”
RIA sentiment survey tech spending
Reinvesting in tech
Advisors are looking to reinvest recent gains back into their businesses, respondents say. Along with marketing and hiring, RIAs plan to bolster their technology offerings to improve the client experience and stay up-to-date with their competitors.

Tools like digital documents and e-signatures, as well as new CRMs, are all on the table for 2018.
RIA sentiment survey obstacles to growth
Obstacles to growth
What’s keeping advisors up at night?

New regulations are the biggest potential roadblock to future growth, say RIAs, as well as a lack of consumer awareness about what makes independent RIAs different from other financial services providers. Half of all respondents think regulations could thwart new growth, while 46% of respondents think clients need to be better educated about RIAs.

“In the past, clients stumbled on RIAs by mistake or through referrals,” Oligino says, “but there has been a concerted effort to grow awareness around what it means to be a fiduciary.”
RIA sentiment survey client concerns
Top concerns for clients
What’s keeping clients up at night?

Trump’s tax overhaul has been the top concern for client portfolios, respondents say, along with corporate earnings.

“The tax plan was hot in the news during the survey,” Oligino says, “and many advisors had clients calling with questions around the impact of the plan on their portfolios.”
RIA sentiment survey marketing
Marketing fuels growth
RIAs predict they will make their biggest investments in marketing — not technology or compliance — in 2018.

“At this point in time, RIAs know to remain competitive they have to be more proactive about how they grow their business,” Oligino says. “They can’t just sit back and wait for referrals.”