RIAs and fee-based advisors are a powerful force, working to drive change and disrupt the status quo by supporting a movement to greater simplicity, transparency and choice, fostering the creation of new business models—and ultimately creating greater value for the investors they serve. Commissioned by Jefferson National and conducted online by Harris Poll in March 2016, Advisor Authority is a comprehensive study that reflects the viewpoints of more than 680 RIAs and fee-based advisors and more than 700 individual investors nationwide.
Advisor Outlook
Volatility remains advisors’ number one concern when it comes to investing, protecting clients’ portfolios and protecting their own practice.
RIAs and fee-based advisors say volatility will have an adverse impact across the board—and more than three fourths expect it to rise. Yet, roughly two thirds of RIAs and fee-based advisors still say their outlook for 2016 is optimistic—and more than three fourths expect the profitability of their practice to increase.
Nearly two thirds of advisors feel pressure to revise their investing strategy in this volatile market.
More than two thirds say they will invest more conservatively, and three fourths say they will invest more tactically. The most successful advisors are even more likely to invest tactically.
Optimistic about their practice, advisors’ top priority is the pursuit of profitability—and the push for new clients remains the top driver.
And, like last year, advisors continue to target an “Emerging Market” of new clients to drive growth and profits. The most successful advisors are a step ahead, targeting an even younger generation, far more focused on retaining clients’ heirs and investing in innovative marketing to build a durable franchise for the future.
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Transparency matters.
More than two thirds of advisors address fees with their clients, and will not make an investment unless they can effectively communicate the strategy to clients—or know their clients understand it. Nearly two thirds address the impact of taxes in some way. RIAs and fee-based advisors are more likely to take a “High-Touch” approach, focused on building relationships and frequent communication, versus a “Low-Touch” approach.
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Investor Outlook
Investors say protecting assets, healthcare costs, saving for retirement and taxes are top financial concerns—and taxes rise in importance for the most affluent.
Investors focus less on managing the market—and focus more on striking a balance between their plans for the future and today’s bottom line. This creates even more pressure for advisors to stay focused on managing the market and the big picture.
Investors say volatility is rising—yet most are uncertain about changing their investing strategy in response.
While volatility is not their top financial concern, investors overall understand it can have an impact on portfolio performance. Only the HNW rate volatility the number one factor that will impact their approach to investing.
Investors’ outlook for 2016 is tentative—but investors who work with advisors are far more optimistic than those who do not.
Facing uncertainty at home and abroad—as they try to manage their bottom line, their taxes and their plans for the future—many investors struggle to understand how they can control these complex dynamics. Yet, almost half of investors who have an advisor say they are optimistic, compared to roughly one third of investors who do not.
Investors value experience, a holistic approach and a fee-based fiduciary standard most.
As markets grow increasingly volatile and the world becomes increasingly complex, investors seek an experienced advisor who can provide holistic and personalized service—and one who will put their best interests first. Relationships matter—but many wealth managers serving High Net Worth and Ultra High Net Worth clients say that when it comes to communications, the most affluent value quality over quantity.
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