According to a new survey by TD Ameritrade, RIAs have found the economy to be in good fettle and are optimistic about business prospects. According to the survey, 51% think the stock market will go up next year and 68% are very or somewhat optimistic about the U.S. economic outlook.

The “2020 RIA Sentiment Survey” took the pulse of 301 independent RIAs, three-quarters of whom were owners, presidents or CEOs. Eighteen percent were “very optimistic” about the U.S. economy next year, an increase from 11% in 2019. The e-mail survey was conducted between November 22 and December 1 of last year, however, before the start of the new year and the recent geopolitical turmoil that began with the United States’ air strike in Iraq that killed an Iranian major general.

According to the TD survey, the top headlines affecting clients’ portfolios last year were the domestic economy (named by 68% of respondents), corporate earnings (named by 66%) and trade tensions (named by 65%). Geopolitical anxiety came up among only 45% of responses, falling behind the U.S. presidential election, which 54% of RIA respondents said were affecting client holdings.

The optimism could likely have been prompted by several spots of good news in 2019, specifically the 29.9% price return of the S&P 500 and reduced fears about a recession.

That translates into good news for RIAs’ own businesses as well, as 82% of the respondents said that their AUM had increased for the year; three-quarters expect growth next year as well, and 40% said that the growth will come at a faster rate. When carving out 212 respondents, the average growth of assets was 16%. More than 70% saw new client growth in 2019 and 75% saw revenue growth. A third of new clients came from brokerages, the survey said.

What It Means For RIA Business

The survey also asked advisors about practice management. Vanessa Oligino, TD Ameritrade Institutional’s director of business performance solutions, says it was an online survey without anecdotes, but she helps advisors with practice management issues in workshops, and is plugged into their mind-set and concerns. One of the wellsprings of optimism here is the fact that the RIA channel has been growing faster than other channels, Oligino says.

Investing in technology has been a big deal for these firms (38% cited tech as their biggest spending increase in 2019).

“They are not really using some of the newer technology, the things that are more experimental,” Oligino says. “More are looking to explore those for 2020. … One of the disconnects that we find is that advisors want to be more productive, they want their teams to be more productive. They want to automate workflows. But they are a little intimidated by technology and it can be overwhelming.”

When asked where they were making significant tech investments in 2020, 43% of the respondents said performance reporting, the same number said CRM tools and 37% said cybersecurity. Digital and e-signature applications were named by only 23% and robo-advice was named by only 4%.

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