FAs Are Opening Fewer Accounts in 2018, Envestnet Says
New account openings by financial advisors have slowed in the second quarter and the trend is likely to continue for the rest of the year, according to Envestnet CEO Jud Bergman, InvestmentNews reports.
Speaking in a conference call to discuss the fintech firm’s second-quarter earnings, Bergman said new account growth was likewise slow in 2011 and 2015 and attributed the 2018 slowdown to the markets, according to the publication.
"I think it’s more of a news cycle that may be taking its toll on some psychology of investors, causing a little bit of slowness," he said, according to InvestmentNews. "Advisers across the industry are not opening up as many new accounts and there is higher redemption rates with existing accounts."
Nonetheless, Envestnet’s second-quarter revenue was up 20% over the same period a year ago, the publication writes. The firm is focused on developing financial planning and client relationship management services geared toward RIAs, Envestnet’s fastest-growing advisor channel, Bergman said, according to InvestmentNews.
He also said that the industrywide transition to fee-based accounts, including as wirehouses “embrace a fiduciary standard of care and seek technology innovation,” will help Envestnet grow, the publication writes.