The RIA community returned to a growth mode in the second half of 2009, as 72% of advisors surveyed said their business was in an expansion mode, according to a semiannual AdvisorBenchmarking survey conducted by Rydex SGI. Most see that growth continuing in 2010.
On a scale of 1 to 5, 84% of RIAs surveyed ranked their level of job satisfaction a 4 or 5. Fully 72% of them said that their assets under management rose last year and 88% attributed that growth to both new client acquisition and market performance. A slightly smaller proportion of the group, 72%, said growth came from new assets from existing clients.
Despite the improved business outlook, RIAs continue to expand cautiously. In the year ahead, 42% expect to increase spending on marketing, 40% plan to shell out more capital for technology, while a smaller 23% will invest in client appreciation activities.
Although only 1% of those surveyed plan to downsize their business this year, 28% plan to spend less on travel and 41% plan to reduce bonuses.
In a sign that could point increasing consolidation in the years ahead, 30% of RIAs surveyed but Rydex SGI said they considered merging with another firm last year, according to Maya Ivanova, research director of the AdvisorBenchmarking survey.
Use of alternative investments continues to advance following the financial crisis, with 53% of RIA ranking their knowledge of these vehicles as above average. Only 10% said they had no experience using them.