Regulation, Not Growth, Is Top Concern for RIAs

RIAs have a lot on their plates. They’ve seen their assets drop significantly over the last year, their clients are demanding more of their time, revenues are taking a hit and on top of it all, there’s potential for major regulatory changes in their industry.

RIAs have a lot on their plates. They’ve seen their assets drop significantly over the last year, their clients are demanding more of their time, revenues are taking a hit and on top of it all, there’s potential for major regulatory changes in their industry.

In fact, investment advisors are spending more time worrying about what the regulatory changes mean for them than about how to encourage business growth, according to a study by TD Ameritrade Institutional. The report surveyed 503 RIAs last month and asked what their top business concerns were for the next year.

More than a third of respondents cited regulatory changes as their top concern, and a majority expect they will need to dedicate more of their time to managing new regulatory requirements, which they say could reduce time with clients. Just six months ago, RIAs cited business growth as their number one business concern.

“Regulatory changes are clearly weighing on the minds of RIAs right now, reflecting a growing fear of the unknown,” says Brian Stimpfl, managing director of advisor advocacy and industry affairs at TD Ameritrade Institutional. (Click here for more on the federal government’s overhaul of financial regulation.) Regarding the overhaul, two-thirds of respondents say they’d like to see the fiduciary standard extended to registered reps.

Whatever the results of the coming regulatory overhaul, 44 percent of respondents say they will either absorb any additional costs it generates, or pass that cost on to clients. Click here to read more about the compliance costs RIAs face.

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