Optimistic RIAs Flex in the Face of 2020
Realities, Using Technology to Serve Clients and Keep Firms Focused
on the Long-Game
In spite of the COVID-19 pandemic, independent registered
investment advisors (RIAs) are hopeful for the better days that lie
ahead. According to findings from a new survey conducted for TD
Ameritrade Institutional[1], advisors remain bullish on the future
of the economy, the market and their businesses, and in the
near-term, they’re focused on helping clients navigate uncertain
times.
Though they have a more somber outlook for the end of this year,
more than 60 percent independent RIAs participating in the TD
Ameritrade Institutional’s 2020 RIA Sentiment Survey Mid-Year
Update are optimistic about the prospects for the U.S. and global
economy in 2021. A quarter believe that stocks will increase by
year-end, whereas 62 percent have a bullish stock market outlook
for 2021.
As we head into the second half of a year that has already dealt
investors significant challenges, RIAs are paying close attention
to headlines on the U.S. economy, the presidential election and
corporate earnings for their impact on client portfolios.
Consistent with their expectations heading into 2020, they believe
the Information Technology, Health Care and Financial Sectors will
outperform this year.
“The saying, ’Keep calm and carry on’ has served advisors well
during these unprecedented times, as they help their clients – and
themselves – make sense of, and adapt to, current events that are
impacting their long-term goals,” said Vanessa Oligino, managing
director of business performance solutions for TD Ameritrade
Institutional, a provider of brokerage and custody services to more
than 7,000 RIAs. “The results show that investors want financial
guidance they can trust, which is why RIAs are growing even as they
are having to pivot rapidly and in some cases, rethink large
portions of their operations.”
Fifty-eight percent of RIAs have continued to onboard new
clients during the coronavirus pandemic, with client bases
increasing nearly 6 percent during this time. Forty-three percent
report AUM increases of 8 percent on average, and forty percent of
RIAs have seen revenues increase at a similar rate.
RIAs are Back in the Office, but It Looks Different
As the number of positive coronavirus cases rises across the
country, RIAs remain undeterred when it comes to taking care of
their clients – though it is not back to “business as usual” for
most firms.
More than 60 percent of RIAs are already back in the office, but
COVID-19 concerns and precautionary measures have changed what this
looks like for many. Thirty-six percent of firms are juggling split
in-office and remote work schedules to allow for social distancing,
and 28 percent are providing staff with PPE.
And 42 percent of advisors say concerns about a rise in COVID-19
cases are holding their folks back from returning to the physical
office, while an additional 31 percent worry about their staff
morale, health and general safety. And COVID-19 has thrown RIAs
another curveball as well: many are now juggling family obligations
that, pre-pandemic, were not a concern and did not impact their
ability to get into the office.
Technology Holds the Key to Client Communications in the
RIA’s New Normal
Thirty-three percent of RIAs report that since the pandemic,
they have upgraded their technology to facilitate team and client
engagement. Throughout these times, 68 percent of RIAs have
increased the frequency of their client communications, and 88
percent report that the quality of these interactions is as good
as, if not better than, they were pre-pandemic.
Video conferencing has taken off among RIAs this year, with 84
percent now videoconferencing regularly with clients. Indeed, in
the early days of the coronavirus pandemic in the U.S., 64 percent
were doing so at least weekly. Though 60 percent of advisors doing
client video conferences today were doing so before the onset of
the pandemic in the U.S., nearly 40 percent ramped up on these
tools in response to COVID-19.
Personalized videos and secure texting are also popular
client-facing applications now favored by RIAs.
Looking Ahead to What’s Next
Though four in 10 advisors have already invested more than they
planned on technology for 2020, advisors view these expenditures as
vital to how they do business going forward. Ninety-one percent say
their use of virtual meeting and virtual chat tools will remain at
a high level once social distancing restrictions have eased.
While it’s a full-court press on technology, advisors have put
the brakes on other areas for now. They are spending less than
anticipated in areas like marketing and professional development
budgets. And for the moment, RIAs have eased up on hiring: 66
percent are not actively recruiting right now.
Advisors hold a similar view of deal-making when it comes to
their own firms. Though 42 percent expect others to pick up the
pace on mergers and acquisitions, just 36 percent are considering
some kind of transaction for themselves in the near future.
“The entrepreneurial spirit of RIAs is what enables them to be
flexible and find technology solutions that can bridge both
physical and relational gaps, bringing them closer to their
clients,” said Oligino. “It’s exciting to watch this industry of
innovators rise to the challenges brought forth by the coronavirus
pandemic, knowing that advisors are using this time to connect with
clients so they can be confident in their investing strategy and
approach for the long-term.”
Click here to download the TD Ameritrade Institutional 2020 RIA
Sentiment Survey Mid-Year Update.
[1] TD Ameritrade Institutional is a division of TD Ameritrade,
Inc., a brokerage subsidiary of TD Ameritrade Holding
Corporation.
About the Survey
Results for the TD Ameritrade Institutional 2020 RIA Sentiment
Survey Mid-Year Update are based on an online survey, conducted by
True North Market Insights on behalf of TD Ameritrade
Institutional, a division of TD Ameritrade, Inc., between July 14
and July 29, 2020. 158 independent registered investment advisors
averaging $234 million in assets under management participated in
this study. Participants, both clients of TD Ameritrade
Institutional and non-clients, were asked to share their views on
economy, the outlook for their firms and the RIA market overall.
The margin of error for the survey is ± 6%. True North and TD
Ameritrade are separate and not affiliated and not responsible for
each other's services or policies.
About TD Ameritrade Institutional
TD Ameritrade Institutional empowers more than 7,000 independent
registered investment advisors to transform the lives of their
clients. It provides powerful technology and resources that help
simplify running a business and let advisors spend more time doing
what matters most — serving their clients. Through meaningful
innovation, steadfast advocacy and unwavering service, TD
Ameritrade Institutional supports RIAs as they build businesses
that positively impact their clients and communities. TD Ameritrade
Institutional is a division of TD Ameritrade, Inc., member
FINRA/SIPC, a brokerage subsidiary of TD Ameritrade Holding
Corp.
About TD Ameritrade Holding Corporation
TD Ameritrade provides investing services and education to
approximately 13 million client accounts totaling approximately
$1.5 trillion in assets, and custodial services to more than 7,000
registered investment advisors. We are a leader in U.S. retail
trading, executing more than 3.5 million daily average revenue
trades per day for our clients, one-third of which come from mobile
devices. We have a proud history of innovation, dating back to our
start in 1975, and today our team of nearly 10,000-strong is
committed to carrying it forward. Together, we are leveraging the
latest in cutting edge technologies and one-on-one client care to
transform lives, and investing, for the better. Learn more by
visiting TD Ameritrade’s newsroom at www.amtd.com, or read our
stories at Fresh Accounts.
Source: TD Ameritrade Holding Corporation
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version on businesswire.com: https://www.businesswire.com/news/home/20200825005120/en/
Media Contact: Joseph A.
Giannone Communications + Public Affairs W: 201-369-8705
joseph.giannone@tdameritrade.com
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