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.