Notwithstanding wobbly equity markets of late, RIAs are overwhelmingly optimistic about what the future holds for their firms.
Charles Schwab surveyed leaders in more than 600 RIA firms advising on more than $209 billion in assets to get a feel for what the industry is expecting in the near term.
Half said they expect between 5 and 10 percent growth next year, 32 percent said they expect to grow between 11 and 20 percent, and 15 percent expect their firm to grow by more than 20 percent.
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While some prognosticators suggest equity markets have little room for growth in the face of an inevitable increase in interest rates, RIAs have more confidence in the Standard and Poor's 500 prospects than they have had at any point in the past three years: 67 percent see the index increasing in the next six months.
That doesn't mean RIAs expect smooth sailing.
Almost all—97 percent—agree that there will be market volatility, and 80 percent expect geopolitical issues and global markets will impact returns at home.
Almost all RIAs said they've had to reassure clients in the past six months that they will be able to meet their investing goals, but on average only 18 percent of clients needed such assurances, the lowest reported level since 2007.
That fact—that less reassurance has been needed in spite of recent market volatility—suggested a high level of trust in RIAs, thinks Bernie Clark, head of Schwab Advisor Services.
"The RIA industry continues to grow at an incredible rate and he future opportunities are significant, including $23 trillion in assets outside the independent channel in household with more than $500,000 in investable assets," said Clark.
"With their clients needing the lowest levels of reassurance since 2007, even in the face of intense market and geopolitical volatility, it's evident that advisors continue to act as trusted partners and that this will provide a foundation for continued firm success," he added.
Two-thirds of advisors say technology is positively impacting their practices, and 68 percent said technology is central to their operational strategy, as it affords more face-to-face time with clients, which is seen as being incumbent to driving growth.
"Technology is no longer simply equated to productivity or back-office data management," said Clark. "When envisioned and implemented strategically, technology is a growth enabler."
RIAs said they would recommend robo-advisory services for clients that don't meet firm minimum investment requirements, or to children of clients as a strategy to capture intergenerational wealth.
One-third of the advisors surveyed think up to 10 percent of new assets in the next year are likely to be appropriate for automated investment management.
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Nick Thornton
Nick Thornton is a financial writer covering retirement and health care issues for BenefitsPRO and ALM Media. He greatly enjoys learning from the vast minds in the legal, academic, advisory and money management communities when covering the retirement space. He's also written on international marketing trends, financial institution risk management, defense and energy issues, the restaurant industry in New York City, surfing, cigars, rum, travel, and fishing. When not writing, he's pushing into some land or water.
