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Advisors Are Optimistic About Growth but Lack the Bandwidth

While many advisors expect to gain new clients over the next year, few have the time for prospecting, as they focus on meeting or communicating with current clients, according to a Natixis survey.

Financial advisors expect their assets under management to grow by 7.2%, on average, in the next year, mainly due to new assets coming in from new and existing clients, according to a new survey by Natixis Investment Managers. Yet, few advisors have the bandwidth to do business development, with only 9% of their time, on average, dedicated to prospecting each week.

About half of advisors’ time accounts for meeting or communicating with current clients, while investing or reallocating client investments takes up 15% of their time. The remaining 23% of their time is spent on general administration, marketing, compliance and education/reading/social media.

Advisors’ time management could be related to a fear their clients will leave, with nearly seven in 10 (69%) saying that failing to communicate with clients in a way that they expect was the top reason why investors would leave their financial advisors, the Natixis survey found. Sixty-four percent of advisors said investors would leave for not listening to them, while just 27% cited investment returns.

Advisors also face a shift in the competitive landscape. While six in 10 (60%) cited other traditional financial professionals as their biggest competitor today, that’s expected to shrink, with just 25% of them expecting that to be the biggest competitor in five years. Looking out five years, advisors see new entrants/disruptors in the financial industry, automated advice platforms and improved tools for self-directed investors as bigger competitors than today, with 25%, 23% and 24% of advisors indicating so, respectively.

Despite the challenges, advisors were optimistic about their growth prospects for the next year, and 81% believe the current market is favorable for active portfolios.  

The results came out of a Natixis survey of 300 U.S. financial professionals with a combined $29 billion of client assets from wealth managers, RIAs, financial planners, wirehouses and independent broker/dealers.

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