Improving efficiency and enhancing client experience may be the top two priorities cited by RIAs for 2017, but that’s not reflected in how they plan to invest in their businesses, according to TD Ameritrade’s RIA Sentiment Survey.
Beating out technology, hiring, compliance and client relations, marketing is the area where 27 percent of RIAs expect to increase spending. Meanwhile, less than 20 percent plan to spend more on technology, while only 12 percent plan to invest more in client relations.
Advisors see the new year as an opportunity to pivot marketing efforts in order to attract younger clients and build on a strong 2016, when 60 percent of RIAs saw revenue increases and 70 percent saw client assets increase.
Advisors, in general, are bullish for the first half of 2017, as their optimism for the U.S. economy has hit an eight-year high. In anticipation of a strong stock market, more than 50 percent of RIAs intend to increase stock allocations, while 70 percent plan to decrease bond holdings.
And while the economy certainly isn’t discouraging RIAs for the near future, neither are forces from within the financial services industry.
Much has been spoken about robo advisory firms taking the place of traditional advisors, but over 80 percent of RIAs said they are either not very or not at all concerned about robos stealing clients. Flesh-and-blood advisors feel they attract different clientele than robo firms, and that their businesses have not been impacted even while the number of robo advisors has increased in recent years.
So, it’s not surprising that only 4 percent of RIAs are considering investing in some type of robo advice to incorporate into their practices.
The technological focus of 2017 will include performance reporting and financial planning tools, and in terms of more “advanced technology,” as defined by the survey, “e-signature” is the top interest for independent advisors.
“These are good days for independent RIAs, yet we can’t expect market tides will always rise,” said Tom Nally, president of TD Ameritrade Institutional, in a press release. “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.”