Data & Research February 5, 2009

Many RIAs Report Firm Growth

In the last six months, 60% of surveyed independent registered investment advisers (RIAs) reported an increase in clients, many of which are coming from broker/dealers and wirehouses.
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Even if they are not growing their client base, the overwhelming majority of RIAs are not losing clients. The survey by TD AMERITRADE Institutional also found 90% of RIAs reported increased growth or no change in the number of new clients.

Client growth rates among firms varied, TD AMERITRADE said. Of the respondents who reported growth in client numbers in the past six months, two-thirds have seen growth rates up to 10% and another third reported growth rates exceeding 10%.

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According to the survey, one-half of new assets at RIAs are coming from wirehouses and broker/dealers. When asked about assets leaving their firm, nearly half of RIAs reported losing assets to known sources including other RIAs (20%) and banks (15%). Few respondents reported losing assets to either broker/dealers (8%) or wirehouses (3%), according to the results.

“This survey shows RIA firms have solidified themselves as the model of the future in this difficult market,” said Tom Bradley, president of TD AMERITRADE Institutional, in a press release of the survey results. “Advisers are moving full-speed ahead as the independent model gains in popularity with clients.”

Future Concerns

Even though many RIAs are seeing business growth, it is also the top concern for them. According to the survey, when factoring in the current economic climate, RIAs reported the top five concerns for their practice over the next twelve months are: business growth (26%), the macro-economic environment (24%), managing risk (18%), regulatory changes (9%), and marketing and operational efficiency, which tied at 6%.

Respondents are maintaining their current business strategy (43%) and looking to increase revenues (42%). In order to increase revenues, respondents reported they will increase their marketing efforts (46%) and expand into new markets (32%).

According to the survey, one in 10 firms is looking to reduce expenses. Reducing the owner/principal’s compensation (42%) and outsourcing back-office activities (22%) topped the list of ways these RIA firms will look to cut costs in the next 12 months.

The results are based on a survey of 506 RIAs conducted by Maritz, Inc. on behalf of TD AMERITRADE Institutional.

 

Products February 5, 2009

INTECH Puts Market Neutral Strategy into Gear

INTECH Investment Management LLC has announced the formal launch of its Market Neutral strategy.
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According to an announcement from INTECH, a subsidiary of Janus Capital Group, the strategy builds on the same volatility capture strategy that the firm has implemented since 1987, while targeting an absolute return above LIBOR.

Using INTECH’s proprietary investment process, the Market Neutral strategy seeks to outperform the three-month LIBOR rate over rolling three- to five-year periods, according to the firm. The strategy will target leverage of approximately $1 of short exposure and $1 of long exposure for every $1 in the portfolio’s nominal value. With a target beta of approximately zero, the strategy extends INTECH’s existing long-only Large Cap Core investment process to build an absolute return product.

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For the three-month period ended December 31, INTECH’s Market Neutral strategy has generated positive returns and outperformed the LIBOR three-month rate by 1.84%, net of fees. For the one-year period ended December 31, the strategy outperformed the LIBOR three-month rate by 1.2%, with an annual return of 3.98% net of fees, as of December 31.

Other Disciplines

In addition to the Market Neutral strategy, INTECH’s risk-managed active equity disciplines include:

  • Broad Large Cap Core 130/30
  • Enhanced Index
  • Enhanced Plus
  • Global Core
  • International Equity,
  • Large Cap Core
  • Large Cap Growth
  • Large Cap Value.


As of December 31, INTECH had approximately $42.4 billion under management and 82 employees. INTECH is an independently managed subsidiary of Janus Capital Group.

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