For those of you working in the wealth management and financial advice sector, take note. Independent registered investment advisors (RIAs) say an increase in client assets from customers leaving full service firms for RIAs is prompting the independents to hire more advisors.
According to the latest Advisor Index Survey released by TD Ameritrade Institutional, RIAs report an average annual revenue growth rate of 15 percent and a majority (57 percent) said new client assets continue to come from full-commission firms, up slightly from 55 percent in 2011. To maintain momentum, many RIAs are making the move to add staff to help sustain this growth. Nine in 10 advisors report the total number of clients has increased or remained steady over the past year.
The survey of 502 RIAs found that nearly 40 percent are considering adding staff in the next six months. Of those advisors looking to hire, one-fourth will look to hire a female advisor to help attract and retain female investors. Notably, nearly 80 percent of advisors have experienced no turnover in their offices in the past year.
“Adding staff is a very important process for each advisor,” said George Tamer, director, strategic relationships, TD Ameritrade Institutional. “As business owners, RIAs share a common goal of finding a balance of talent, skill and personality to fit within their current culture and values. The survey mirrors what we’ve been hearing from advisors, who say successfully cultivating new staff in an advisor’s business can be a difficult task, but in the end, it is essential for growth.”
Hiring (22 percent) and firing (18 percent) topped the list of human resources challenges advisors say they face today. Developing (12 percent) and training staff (12 percent) were also areas of concern. Compared to 2011, more advisors report increased spend on human capital efforts, including professional development (43 percent), staffing (40 percent) and salaries and bonuses (50 percent).
“Properly managing the human capital in your business is just as important as managing the bottom line numbers,” said Tamer. “It’s in the best interest of your clients and the success of your business to provide meaningful training and opportunities for growth to attract and retain the best talent in the industry.”