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What Concern Looms Largest for Advisors?

Advisors participating in the nation’s retirement plan advisor convention brought a lot to the sessions, networking, and – for the first time ever, sharing valuable insights via a new medium: the NAPA 401(k) SUMMIT Insider.

While there was no shortage of big issues to focus on, “client retention” loomed largest for survey respondents. Nearly a quarter (24%) said it was “very important,” and another third (33%) rated it as an “important” consideration. That wasn’t far ahead of fee compression, which was cited as “very important” by nearly one in five (19%) and “important” by 38%, though the two stood out among the issues cited.

The fiduciary regulation – whose ultimate status was still very much in flux while the survey was fielded – was a distant third (14% very important, 34% important), just ahead of the markets (11% very important, 33% important) and outdistancing provider consolidation, which was rated “very important” by just 6%, and important by 31%.

Interestingly enough, those priorities held up pretty consistently regardless of the target market of the advisor.


Other Issues

If those were the big issues, a number of other significant issues emerged as well. Issues related to business growth were frequently cited: the ability to attract (and retain) talent, the challenges of advisor group consolidation, keeping up with technology, compliance, issues of cybersecurity, and the reality that, as one respondent noted, “the competition keeps getting better.” Growth concerns also manifested themselves in concerns expressed about managing growth, maintaining that growth, and practice management generally, as well as scaling their practice to maintain service levels even as consolidation and support compression continues.

Not surprisingly, succession planning also emerged as a predominant concern, and there was a palpable sense that many respondents were contending with all of these challenges. As one respondent explained: “Our industry is currently changing at a rate faster than it ever has. This is leading to all kinds of confusion at the service level, compensation level, keeping up with the changes, etc. But the biggest problem because of this change that I face is trying to attract new talent to this business so that eventually I can sell my business. To me it’s actually affecting the value of my business.”

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