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Successful RIAs Focused on Next Generation

Successful advisors — those who earn more and manage more AUM — target younger prospects, and are more likely to invest in strategies to attract and retain the next generation, according to a new report.

According to Jefferson National’s second annual Advisor Authority study, the top three strategies being implemented by advisors to attract the next generation of investors include:

  • 36% - working more closely with a client’s family and children

  • 36% - increasing use of innovative techniques such as social media

  • 26% - increased use of mobile technology

  • 24% - increased use of personalized holistic advice

The survey, conducted by Harris Poll of 683 RIAs and fee-based advisors nationwide (as well as an expanded survey of 733 individual investors) finds that Registered Investment Advisors (RIAs), fee-based advisors and individual investors all cite managing volatility, protecting assets and saving for retirement among their top concerns over the next 12 months — but cautions that advisors may underestimate clients’ concerns in other areas, notably healthcare costs and taxes, the latter particularly among the ultra-high net worth.

Priorities in Choosing Advisor

When choosing an advisor, investors’ top three priorities include:

  • 46% - experience

  • 26% - personalized holistic advice

  • 24% - a fiduciary standard

The survey also found that more than three-fourths (77%) of RIAs and fee-based advisors will not make an investment unless they can effectively communicate the strategy to clients — or know their clients understand it.

Other Findings

Investors’ outlook for 2016 is apprehensive — but investors who work with advisors are far more optimistic (47%) than those who do not (35%).

Volatility is on the rise over the next 12 months, according to the vast majority of advisors (76%) and investors (63%) surveyed.

Advisors are more likely to revise their investing strategy in response to market volatility — with nearly two-thirds (62%) of advisors feeling pressure to act versus just 41% of investors. Of those who will revise their strategy, 75% of advisors and 72% of investors plan to invest more tactically, while 69% of advisors and investors plan to invest more conservatively.