Pressured by declining fees, increasing competition and more stringent regulations, advisors are nonetheless optimistic, according to San Francisco-based Schwab Advisor Services.

In the 21st Schwab Independent Advisor Outlook Study, advisors say they are feeling pressured to differentiate themselves as other channels of the industry adopt policies and practices to look and act in similar manners, said Bernie Clark, executive vice president and head of Schwab Advisor Services.

“Advisors have remained optimistic, even in the darkest periods of time, but they’ve often had to change their tactics,” Clark said during a Tuesday conference call.

As the Department of Labor’s fiduciary rule becomes applicable, independent advisors will have to consider ways to differentiate themselves, Schwab said. Most, 76 percent, believe that they will be able to use technology to stay ahead of their competition.

Two-fifths of the survey’s respondents say the independent model will differentiate itself from other channels by offering clients a broader range of services, like tax, philanthropic and health-care planning.

“We think independent advisors have an advantage. Those who can be more creative in delving into the personal side of client relationships and help people through life coaching and areas like that are going to be greately rewarded by clients,” said Clark.

Faced with competition and fee pressure, advisors say that they’re doing more for less. According to the study, 44 percent of advisors have already begun providing more services to their clients without charging for them, and 40 percent of advisors have started spending more time on each client without increasing fees.

“Advisors are going to do more, or serve more assets, with similar numbers of resources,” said Clark. “It is a form of fee pressure. We’ve been calling for fee pressure for quite some time, but instead of a reduction, we’ve seen more services for the same fee.”

In order to continue to compete for clients, advisors will have to scale up their practices, said Clark, so they can distribute the cost of additional services.

Twenty percent of survey respondents believe that they will differentiate their firms by accentuating their commitment to more stringent standards for fiduciary advice.

“We are addressing the solutions we bring to clients with an eye to the DOL rule discussion,” said Patricia Williams of Silicon Private Wealth,a Fremont, Calif.-based boutique wealth manager, during the conference call. “Cost is front and center to those discussions, and implementation now requires the broadest choices of solutions.”

Most of the respondents are dealing with anxious clients; 84 percent of the survey’s respondents say that they’ve had to calm client nerves over the past six months despite record returns across many equity markets.

According to Schwab, political uncertainty drives much of the current investor anxiety. While 34 percent of respondents say that the current political environment is the topic du jour during client conversations, twice that proportion, 68 percent, say the political environment is causing “a lot” of concern among clients.

“I was a little surprised ... at the number of conversations that clients wanted to engage in around the impacts of the political shifts that were going to take place post election,” said Williams. “People were tying together in a different way than I had seen in the past; the ramifications of the election outcome and policy changes as they would play out in their portfolios. … That led to healthy discussions with their advisors around what they’re worried about.”

Williams said that advisors should match their clients enthusiasm and be proactive in adjusting to political and policy changes.

Half of the advisor respondents reported that they felt nervous about the political climate themselves, but most were optimistic about the financial planning industry.  More than three quarters of the respondents, 79 percent, were confident about the future of their industry and expect more opportunities in the next 10 years.

With $23 trillion in assets held outside of the independent channel, advisors have a huge opportunity, said Clark.

“Advisors plan on growing, want to grow and by and large they’re becoming legacy firms who want to continue into perpetuity with a next generation of owners taking over,” said Clark. “Growth is going to continue unabated based on the desires of advisors and the strategies within firms.”

Most of the respondents, 61 percent, see financial planning as a young industry. As the industry matures, firms are strategizing and streamlining their operations while actively pursuing organic growth. Seventy-one percent of advisor firms say they have a client acquisition strategy.

The study’s respondents cast a wary eye on regulations, including the DOL’s fiduciary rule. Many advisors said that the current regulatory environment will impact their investments in employee training, and 23 percent said it would impact their hiring decisions. Similar numbers foresee regulatory impacts on marketing and vendor selection.

“It’s become confusing now. Within the traditional world, advisors are becoming fiduciaries on the non-taxable side, but what are they on the other side where suitability has been the law of the land?” asked Clark. “The SEC needs to move quickly on the fiduciary issue so that the SEC and DOL can come together and harmonize an understanding of the fiduciary standard.”

Other areas of concern for advisors included U.S. market volatility, tax legislation, interest rate policy and global market volatility.

Schwab interviewed 912 advisors at independent investment firms with assets custodied at Schwab in March and Aprill.