An independent survey by E*TRADE Advisor Services reveals that financial advisors had a healthy stream of clients this year and are upbeat that growth will continue into 2020.
More than four-fifths of advisors (82%) said they saw an increase in client numbers, and nearly nine in 10 expect to grow their assets under management. Of those, 62% anticipate a 6% to 15% increase in AUM, and one-quarter expect AUM growth exceeding 15%.
Despite those growth expectations, advisors are cautious about retaining clients, which 28% cite as the biggest challenge to their business in 2020. That was followed by technology improvement (21%) and consolidation within the RIA industry (16%). Five percent see succession planning as their main challenge next year.
The survey covering advisor views on the market, the industry, their business and clients was conducted in-house earlier this month. It included 262 independent RIAs.
It showed that market volatility is the top market concern for advisors. Sixty-five percent indicated they are actively managing volatility risk in client portfolios, followed by interest rate (50%) and recession risks (47%).
Additionally, they are worried about political instability (41%), inflation (25%) and a flattening/inverted yield curve (23%).
And when it comes to consolidation, only 30% believe it will have a positive effect on the industry.
Gabriel Garcia, senior vice president of E*TRADE Advisor Services, said the industry is entering into a significant period of transformation with unprecedented industry consolidation and the fact that more than one-third of financial advisors are expected to retire over the next 10 years.
“RIAs will no doubt double down on their attention to the client experience as global growth slows and service takes center stage," he said in a statement.