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RIAs Expect to Grow Larger and Faster in 2019

By Garrett Keyes January 8, 2019

RIAs say their asset and revenue growth will increase in 2019, a new TD Ameritrade survey reveals.

Almost half of respondents also think they will beat the 18% average asset and revenue growth rate seen at the end of 2018, the survey of over 300 RIAs shows. And RIAs are thinking of offering new areas of expertise to exceed 2018 growth.

“New areas of expertise offer wholly new business opportunities for RIAs. For example, many advisors’ clients are part of an ageing population and need help navigating the health care system,” Vanessa Oligino, director of business performance solutions at TD Ameritrade, says, adding this has led some RIAs to offer “Medicare consulting services” – another tool RIAs can use to add value and win clients.

RIA firms also believe stock markets in 2019 will be conducive to growth, the study reveals. Almost half of survey respondents say stock prices will increase in 2019 and be on par with 2018 expectations, survey data shows.

But advisors are also “keeping the daily stock market drama in perspective,” a TD Ameritrade press release reads. Volatility has recently returned to shake stock markets and it may be here for a little while, according to CNN.

But volatility may also be something RIAs can benefit from. “RIAs help clients understand their choices for weathering market cycles” and “in times of market uncertainty, investors seek out financial guidance from knowledgeable independent advisors,” Oligino says in the press release.

However, keeping up with compliance may still pose a challenge for advisors in 2019.

Almost one-third of respondents think compliance issues will operationally challenge RIAs in 2019, study data shows.

“Compliance is an issue because regulators continue to come out with more and more regulations,” Oligino says. “The government is saying ‘comply with all these rules’ but not giving RIAs the means to do so. And that means more investment in new compliance systems and compliance consultants, which can be expensive,” she says.

Elsewhere, study data shows real estate was the top-used alternative asset in 2018 among RIA clients. A recent Millennium Trust survey similarly showed increased client interest in real estate and private equity investments.