Adviser Resolutions Focus on Growth

Despite a challenging 2008, independent advisers surveyed in an SEI Quick Poll are positive about success in the coming year.

Independent advisers learned a lot last year—such as the importance of the adviser/client relationship and the truth about the risk tolerance of investors—and many are hoping to grow their business in 2009.

More than half of advisers (51%) surveyed predict the markets will rebound by the second quarter of 2009, according to a release of the results. In addition, advisers offered resolutions that suggest they are interested in growth, and not just survival. The resolutions included: “grow the business 20%,” “add $30 million in assets under management,” and “increase revenue by 15%.” But as one adviser illustrated with the goal “keep my head above water,” they recognize the challenges ahead.

The biggest gripes about the previous years, according to the results, included pay cuts and the need to scale back business expansion. More than half (56%) of advisers said their biggest gripe was the nearly 40% pay cut they saw because of market depreciation. Thirty percent said it was scaling back on business expansion plans.

Many advisers saw opportunity amid the crisis. For example, 40% of advisers said that although volatile markets made clients anxious, it also created an opportunity for them to strengthen client relationships. Similarly, 28% of advisers said the past year “helped clients recognize the value of their strategic personal advice versus investment-only perspective,” according to SEI. When asked what advice they’d give new advisers entering the business, 57% of advisers recommended they position themselves as a trusted adviser by “providing advice and not just investments from the onset.”

The vast majority of advisers are planning some growth next year to replace any lost revenue. Almost half (45%) plan to explore ways to acquire new clients. About a quarter of advisers (24%) said they would increase their efforts with center of influence contacts such as accountants and estate attorneys, and the same number will strengthen existing referral processes. Only 7% plan to do nothing but focus on retaining existing clients.

Advisers also said that 2008’s market conditions taught clients a lot about risk tolerance. Almost half of advisers polled (49%) felt that clients realized they weren’t as risk-tolerant as they’d thought they were, while 33% said clients learned they could handle volatility if they focused on long-term goals, according to the release.

“Even in the face of the challenging conditions of 2008, advisers are determined to find ways to add value to their client relationships,” said Stephen Onofrio, senior managing director at SEI Advisor Network, in the release. “This past year was SEI’s biggest for new adviser recruitment, and we found that most advisers were focused on providing strategy that went above and beyond just investments.”

The top resolutions for 2009 included:

  1. Grow referrals.
  2. Conduct more marketing initiatives.
  3. Hire staff.
  4. Be more proactive with clients.
  5. Retain existing clients.
  6. Add services to practice.
  7. Truly focus on clients’ needs.
  8. Obtain larger clients.
  9. Manage expenses better.

The poll included feedback from 285 independent advisers.