Advisers Bullish on Profitability

Jefferson National’s first annual Advisor Authority Study delves into adviser forecasts on their practices and marketing strategies.

The overwhelming majority of registered investment advisers (RIAs) and fee-based advisers are extremely optimistic about their business, with 81% believing the profitability of their practice will increase during the next 12 months. This is according to Jefferson National’s first annual Advisor Authority Study.

The survey also looked at the practices of three types of advisers: high-earning advisers who generate yearly income of $500,000 or more; advisers with high assets under management of $250 million or more; and technologically savvy advisers who use more than seven software applications, have a strategy to enhance their technology and spend more than $50,000 a year on technology.

Jefferson National found that 80% of high-earning advisers are updating their marketing strategies to attract the next generation of clients, versus 60% of advisers overall. Ninety percent of high-earning advisers are adopting new technology over the next 12 months, compared to 75% of all advisers, and 82% of high-earning advisers have a strategy to enhance technology integration, versus 61% of all advisers.

Adding new clients is the way to improve profitability, said nearly a third (31%) of respondents. Of those advisers planning to add clients, the majority are targeting Generation X, as opposed to Baby Boomers.

Specific technological goals for the next 12 months include adopting new software applications (57%), followed by mobile applications (52%), smart phones (49%), tablets (49%) and cloud-based solutions.

“Our commitment to serving RIAs and fee-based advisers inspired us to launch this annual study to offer powerful insights and practical advice that every adviser can implement today to help build their business for the future,” says Mitchell Caplan, chief executive officer of Jefferson National. “We learned that advisers thrive then they are dynamic and proactive—shifting strategies to capitalize on evolving investor demographics and rapid innovation of technology. Overwhelmingly bullish about their professional future, the most successful RIAs and fee-based advisers are embracing this change—and leading it.”

The Advisor Authority Study surveyed 535 RIAs and fee-based advisers in an online poll conducted by Harris Poll on behalf of Jefferson National.  Survey results can be accessed here.