In Practice June 29, 2009

RIAs Say They Continue to Poach from Wirehouses

Independent registered investment advisers (RIAs) continue to report firm growth and are looking for more revenue through forming strategic alliances and recruitment, according to a survey by TD AMERITRADE Institutional.
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More than 80% of RIAs surveyed report new client numbers are up or remained steady over the last six months, and half reported an increase in new clients, according to a release of the survey results by TD AMERITRADE Institutional, a division of TD AMERITRADE Holding Corporation.

RIAs cited these top three reasons that new clients chose the RIA model, according to the survey:

  • dissatisfaction with service, advice, performance, or fees at full-service brokerage firms (34%);
  • requirement that RIAs offer advice that is in the best interest of clients (21%);
  • more personalized service and competitive fee structure (17%).

Seventy percent of RIAs surveyed said they were able to avoid major business cost cuts over the last six months, despite lower client asset levels, the survey found. Advisers who increased business spending overwhelmingly chose to invest in technology and marketing.

Advisers who decreased business spending trimmed, on average, 19% of total expenses, with travel and marketing among the most common budget items affected by the reduction. TD AMERITRADE noted that responses indicated advisers might be conflicted on whether to increase or decrease marketing spending in the current business environment.

Getting Back Revenue

The survey found that RIAs will look to increase revenues over the next year by:

  • forming strategic alliances with other financial professionals, such as accountants and attorneys (35%) (see “Adviser’s Best Friend’);
  • recruiting and hiring new talent (31%) (see “Better Human Capital, Better Financial Capital’);
  • adding additional services such as estate planning and insurance (29%);
  • exploring merger and acquisition opportunities (22%);
  • specializing in new market segments (16%).

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

  • business owners (67%)
  • Baby Boomers (62%)
  • women (59%).

RIAs planning to expand their practices and offer new services over the next 12 months are most likely to add:


Maritz, Inc., conducted a telephone survey of 503 RIAs in May.

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