Why the Top RIAs Don't Feel Client Pressure to Lower Their Fees
The top RIAs and institutional advice firms say they don’t feel fee pressure from their clients to change their fees, according to a survey of attendees at the annual Pershing Advisor Solutions summit for financial advisors held in March in Dana Point, Calif., where the average RIA’s assets under management were $4.2 billion.
Eighty-four percent of those polled haven’t adjusted their fees in 2017 and 58% say they felt no pressure to do so, according to the survey. Meanwhile, 42% said they did feel pressure to adjust fees — but only 6% lowered them while 10% increased fees, BNY Mellon’s Pershing Advisor Solutions found.
To maintain pricing, 58% of respondents say they focus on holistic wealth management that includes tax and estate planning, 32% say they rely on a strong brand and 10% attribute their ability to keep their fees the same to client referrals, according to the survey. And to keep their businesses growing, the most important advice areas RIAs currently offer are tax planning, private banking services, philanthropy and alternative investments, BNY Mellon’s Pershing Advisor Solutions found.
In light of recent stock market volatility, meanwhile, 77% of respondents say they’re turning to alternative investments, 55% say they’re favoring index funds and 45% favor emerging market equities, according to the survey.
Advisors are concerned about disruption to their industry, however: 52% say they’re worried about nontraditional entrants such as fintech firms or Google, 45% are losing sleep over cybersecurity, 42% are worried about regulation, 19% are concerned with artificial intelligence and 19% are worried about mergers and acquisitions, BNY Mellon’s Pershing Advisor Solutions found.