Growing number of investors are turning to registered investment advisors again

TD AMERITRADE Institutional, that is a division of TD AMERITRADE Holding Corporation, on Monday released the results of the independent registered investment advisors (RIAs) survey. It was found that RIAs inquired continue to report strong growth as investors move their money from wire houses to independent advisors.

Thus, more than 80% of RIAs surveyed report new client numbers are up or remained steady over the last six months as the RIA model continues to build momentum. 50% of the RIAs inquired responded growth in new clients; a lot of them report that clients are seeking for an alternative to full service brokerages. 

The survey also found three top reasons new clients chose the RIA model:

• 34% show dissatisfaction with service, advice, performance or fees at full-service brokerage firms

• 21% of RIAs are required to offer advice that is in the best interest of clients

• 17% of RIAs offer more personalized service and competitive fee structure. 

70% of RIAs surveyed responded they were able to avoid major business cost cuts over the last six months, despite lower client assets levels. 

Below there are the ways RIAs take into the consideration to increase revenues over the next year: 

• Forming strategic alliance with other financial professionals such as CPAs and attorneys (35%t) 

• Recruiting and hiring new talent (31%)

• Adding extra services such as estate planning, insurance (29%)

• Exploring merger and acquisition opportunities (22%) 

• Specializing in new market segments (16%).

RIAs that are considering specializing in new market segments over the next 12 months are most likely to explore: 

• 67% are thinking of Business Owners: 

• 62% - Boomers; 

• 59% - Women. 

Some RIAs are planning to expand their practices and provide customers with the new services over the next 12 months. So they are most likely to add: 

• Retirement Planning (47%); 

• Insurance (35%) 

• Estate Planning (30%) 

• Tax Planning (30 %).