The Good Times Roll - But for How Much Longer?
Indeed, based on recent findings from The 2015 FA Insight Study of Advisory Firms: People and Pay, the typical advisory firm has clearly enjoyed unprecedented success in recent years, but there are no guarantees that this will continue. In particular, the long-running bull market for securities appears to have run its course.
While client growth rates are expected to increase slightly in 2015, a significant anticipated slowdown in AUM growth is poised to affect revenues. These performance trends and others, excerpted from the seventh annual FA Insight study, are detailed ahead.
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The Good Times Roll - But for How Much Longer?
Source: The 2015 FA Insight Study of Advisory Firms: People and Pay.
The Good Times Roll - But for How Much Longer?
Clients have been a steady contributing factor to asset growth over recent years but security markets have had greatest influence on the variability of asset growth. Market appreciation cooled in 2014 to a rate about one-third of what was achieved during a hot 2013 before stalling completely in 2015. Consequently median firm AUM growth has constricted accordingly in terms of what was experienced in 2014 as well as what is expected by the close of 2015.
Source: The 2015 FA Insight Study of Advisory Firms: People and Pay.
The Good Times Roll - But for How Much Longer?
Based on the slowdown in security market appreciation, the opposite will likely occur in 2015 and beyond. Potential revenue increases through growth in clients, offering additional services, or setting higher fees are unlikely to supplant the effects of stagnant security markets on revenue growth.
Source: The 2015 FA Insight Study of Advisory Firms: People and Pay.
The Good Times Roll - But for How Much Longer?
Source: The 2015 FA Insight Study of Advisory Firms: People and Pay.
The Good Times Roll - But for How Much Longer?
Source: The 2015 FA Insight Study of Advisory Firms: People and Pay.
The Good Times Roll - But for How Much Longer?
Image: Fotolia