These Are the Greatest Threats to Advisors’ Practices

Advisors are feeling pressure from managing client expectations and having to navigate compliance and regulation, fee compression, and market performance, according to Broadridge data.


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Client fears about markets is the biggest threat to advisors’ businesses, according to a survey conducted by Broadridge Financial Solutions in August.

The financial technology company, which processes $9 trillion in U.S. securities trades daily advisors to select their top three greatest threats. Forty-seven percent of advisors put client fears about markets in their top three. Compliance and regulation was the next most selected threat with 44 percent of advisors choosing it, followed by the performance of capital markets with 39 percent.

Broadridge surveyed more than 400 registered advisors with at least $10 million in AUM across channels. While only 30 percent of advisors across the different channels ranked the challenges of scaling their business in the top 3, 40 percent of RIAs ranked this in their top 3.

Advisors had a more positive outlook for the next 12 months than investors. According to the data, 66 percent of advisors had a positive outlook on the U.S. stock market 12 months from now, while only 33 percent of investors had a positive outlook on the stock market. The majority of advisors (56 percent) also had a positive outlook on the U.S. banking system while only 41 percent of investors said the same. Similarly, the majority of advisors felt positive about the U.S. economy while only about a quarter of investors felt positive.

“Advisors are twice as positive about the stock market than investors,” said Andrew Guillette, head of global insights at Broadridge. “Advisors are trained professionals and surrounded by lots of research. They’re conditioned to provide a long-term perspective. They’re skilled at managing risk. They have access to research from their shops and they emphasize diversification from day one.”

“That’s why client education is so important. And education is not just sending materials but it’s spending time with an investor,” Guillette said.

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About a third of advisors believe that they don’t have enough time to spend with clients, according to a recent J.D. Power survey. In April, J.D. Power also reported that investor satisfaction with advisors had plunged more than 17 points year-over-year.

Sixty-one percent of advisors surveyed said their clients had become more anxious about their financial situation over the past two years. Only 8 percent of advisors said their clients had become more confident about their financial situation.

Seventy-one percent of advisors said acquiring new clients was in their top three priorities. Deepening relationships with clients was the second most chosen priority, with 69 percent of advisors putting it in the top three, followed by increasing revenue with 68 percent of advisors. Hiring talent, improving technology, cutting costs, and selling the practice were all ranked low on the list of priorities.

Other standout trends in the survey found that 77 percent of financial advisors plan to maintain or increase the number of asset managers they use in the future. Products of interest, positive representation of a firm that they do business with, and having an existing relationship with a wholesaler were all factors that advisors said would make them more likely to take a meeting with an asset manager.

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