Investment advisors say business is up: Survey

JERSEY CITY, N.J.--(BUSINESS WIRE)--According to a recent advisor sentiment survey released by TD Ameritrade Institutional, a division of TD Ameritrade, Inc., a broker-dealer subsidiary of TD Ameritrade Holding Corporation (NASDAQ: AMTD), more registered investment advisors (RIAs) are adding clients and attrition is slowing. The quarterly survey of 500 RIAs shows strong business growth, with 73 percent of respondents indicating an increase in the number of clients over the last six months, up 7 percent over the same time last year. And fewer RIAs are reporting a loss in the number of clients, 5 percent compared to 8 percent last year.

RIAs continued to build momentum in the last quarter reporting the majority of their new assets came from traditional full-commission brokerages over the last six months. The quarterly survey shows growing RIAs continue to win business from traditional full-commission firms and broker-dealers at a strong and steady rate, with a majority (56 percent) of new business originating from these competitors.

“The survey shows RIAs’ independent, fee-based and fiduciary approach to wealth management is a key consideration when investors are choosing an advisor,” said Tom Bradley, president, TD Ameritrade Institutional. “RIAs surveyed indicate their new clients prefer the personalized service and competitive fee structure provided by independent advisors and that, as fiduciaries, RIAs are required to offer advice that is in the best interest of clients.”

Survey Key Findings:

  • Practice Management – The impact of regulatory changes (40 percent), profitability (28 percent) and the macro-economic environment (27 percent) top the list of concerns RIAs have for their practices over the next twelve months. While some uncertainties remain regarding the direction of the economy and pending financial reform, RIAs are taking action in areas they can control including business growth and improving profitability and operational efficiency.
  • Business Spending – The number of advisors decreasing business spending is down 40 percent over the last year. 90 percent of RIAs surveyed say they avoided cost cutting over the past quarter. Advisors who increased business spending increased spending an average of 17 percent. The most common categories benefitting from increased budgets are technology (75 percent), marketing (46 percent) and salaries and bonuses (39 percent). Advisors who decreased business spending trimmed an average of 19 percent of total expenses. The categories adversely affected include technology (49 percent), marketing (45 percent) and travel (40 percent) spending.
  • Market Sentiment – Despite the market volatility over the past several years, RIAs remain steady and bullish in their long-term approach to investment management, with a 48 percent allocation to equities, up 5-percentage points from the previous quarter. The survey indicates advisors continue moving out of cash as allocations are down slightly from 8 percent to 7 percent from the previous quarter. Fixed income (26 percent) and International investments allocations (14 percent) are down from the previous quarter. Advisors surveyed predict Oil & Gas, Technology and Basic Materials sectors will be the best performing and Financials, Utilities and Consumer Goods will be the worst performing over the next twelve months.
  • Economic Outlook – RIAs are increasingly positive in their outlook for the economy, with over 53 percent indicating optimism, up more than 20 percent from the previous quarter.

For full survey results, please visit

Survey Methodology
These results are based on a survey conducted by Maritz, Inc. on behalf of TD Ameritrade Institutional. Five-hundred and one RIAs participated in a telephone survey from March 21 – April 1, 2011. RIAs who custody with TD Ameritrade Institutional, as well as other independent RIAs from across the country were asked to share their views on the economic outlook for their firms and the advisor market in general. The margin of error in this survey is ±4.4%. This means that in 19 cases out of 20, survey results based on 501 respondents will differ by no more than 4.4 percentage points in either direction from what would have been obtained by seeking the opinions of all eligible RIAs. Maritz, Inc. and TD Ameritrade, Inc. are separate, unaffiliated companies and are not responsible for each other's products and services.

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