RIAs Anticipate Another Gainful Year for 2017

A recent TD Ameritrade RIA Sentiment Survey found that independent registered investment advisers (RIAs) see a strong future of success during 2017, as they plan to increase marketing, business development and technology spending while implementing growth strategies.

The optimism appears on several fronts concerning the economy, whether it be national or global. According to the survey, nearly seven in 10 RIAs are bullish about the U.S. economy—the highest number since the survey’s commencement in 2009—and more than half (55%) are positive about the prospects of the global economy. Also, the survey found that 53% expect the U.S. stock market to rise in 2017, and an additional 35% believe the market will hold onto improvements achieved in 2016.

Anticipated Increases for 2017

2016 was an advancing year for advisers, as 70% had assets surge on an average of 17%, and 60% saw revenues increase by a median 16%. Furthermore, 56% had new client growth on an average of 17%. Due in large part to the advances achieved, four out of five believe their firms’ assets will grow further in 2017, and half predict firm assets will increase at a higher rate than last year.

“These are good days for independent RIAs, yet we can’t expect market tides will always rise. RIAs need to deliver a great experience, build firms that are more scalable and make sure they are compensated for all the services they provide,” says Tom Nally, president of TD Ameritrade Institutional. “By investing in themselves, embracing technology and articulating all the value they deliver, RIAs can increase their firms’ chances for sustainable growth.”  

NEXT: Despite Industry Pressures, Confidence Remains High

With the Department of Labor (DOL) conflict of interest rule potentially underway this year, along with the growing use of robo-advisers and the Securities and Exchange Commission’s (SEC) proposed Rule 206(4)-4 requiring business continuity plans, advisers may anticipate 2017 to intensify industry pressures. However, responses from the survey indicate that despite potential pressures, RIAs continue to feel confident.

Eighty-two percent reported minimal to no concerns over robo-advisers as a competitive threat, while the majority of responding advisers are not concerned over the DOL fiduciary rule. In regards to the SEC’s rule on business continuity plans, 57% of advisers have plans finalized, 31% are in the process of developing plans, and eight in 10 of advisers are aware of the requirement.

“RIAs have been the fastest growing channel in the financial advice marketplace in large part because they offer investors a personalized, client-first approach. At the same time, they have to find ways to navigate the myriad market forces converging on the industry if they want to keep growing,” Nally says. “RIAs can continue to grow by facing challenges head on, whether that means developing a robust retirement plan business, attracting a new generation of clients or embracing new technology to deliver a better digital experience.”

More information about the survey findings can be found here.