“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.