A third say assets for new ETF investments will come from cash in 2018, and 27 percent say they will come from the sale of mutual funds. RIAs are less apt to sell stocks to fund new ETF purchases, however: just 9 percent say the sale of individual securities will fund new ETF investments.Although factors such as performance and total costs are important, advisors say the construction of the underlying index is the main reason they chose a particular ETF. This year's survey also revealed that most RIAs do not buy or switch ETFs simply because new offerings have been introduced by a particular sponsor. Instead, advisors say their selections are guided by asset allocation strategies or lower costs. Growing RIAs Expect Another Boost in 2018 For much of the past decade, the RIA industry has enjoyed growth amid the second-longest bull market since World War II. As they look ahead, advisors surveyed are forecasting more of the same in 2018. Seventy-eight percent expect their firm's assets under management to rise in 2018 and nearly half say assets will grow faster than they did in 2017. These sunny projections come on the heels of a largely successful 2017. RIAs report that during the latter half of the year, revenues grew on average by 15 percent, while assets under management grew by 16 percent. Sixty-five percent of RIAs gained new clients last year, for an average growth rate of 16 percent. Advisors say their biggest pipeline for new clients remains the full-service brokerage firms: investors leaving national full-service broker-dealers made up more than a third of their new clients in 2017. Growth takes investment, and RIAs are committing resources to developing their firms. Last year, technology as well as legal and compliance matters dominated firm spending. RIAs predict they will make their biggest investments in marketing and hiring in 2018, in keeping with their top strategic priorities: marketing and enhancing the client experience.
These RIAs say that technology investments that will improve their client experience - such as digital documents and e-signature, and CRM tools - are on the table for 2018.Could anything trip up their momentum in 2018? Advisors say regulations are their biggest potential roadblock as well as a lack of consumer awareness about what makes independent RIAs different from other financial services providers. Just 1 percent of survey respondents are extremely concerned about the threat of robo-advisors on their business. "RIAs naturally want to sustain their recent success, but they can't just sit back and expect tailwinds to propel their growth," said Oligino. "Though the competitive landscape has never been more heated, we see many independent advisors doing what's needed to help their long-term future." Carefully consider the investment objectives, risks, charges and expenses before investing. A prospectus, obtained by calling 866-766-4015, contains this and other important information about an investment company. Read carefully before investing. ETFs can entail risks similar to direct stock ownership, including market, sector, or industry risks. Some ETFs may involve international risk, currency risk, commodity risk, leverage risk, credit risk and interest rate risk. Trading prices may not reflect the net asset value of the underlying securities. Commission fees typically apply. About the Survey The TD Ameritrade Institutional RIA Sentiment Survey was developed to understand the views of independent registered investment advisors (RIAs) on the economy, as well as their outlook for their firms and the RIA industry. Results are based on a telephone survey fielded by MaritzCX, on behalf of TD Ameritrade Institutional, a division of TD Ameritrade, Inc., from November 27 through December 7, 2017. This year's survey included 300 participants handling, on average, $161 million in client assets. The margin of error is +/- 5.6%. TD Ameritrade Institutional and Maritz are separate and unaffiliated and not responsible for each other's services or policies.
About TD Ameritrade InstitutionalTD Ameritrade Institutional is a leading provider of comprehensive brokerage and custody services to more than 6,000 fee-based, independent RIAs and their clients. Our advanced technology platform, coupled with personal support from our dedicated service teams, allows investment advisors to run their practices more efficiently and effectively while optimizing time with clients. TD Ameritrade Institutional is a division of TD Ameritrade, Inc., a brokerage subsidiary of TD Ameritrade Holding Corporation. About TD Ameritrade Holding Corporation TD Ameritrade provides investing services and education to more than 10 million client accounts totaling more than $1 trillion in assets, and custodial services to more than 6,000 registered investment advisors. We are a leader in U.S. retail trading, executing more than 600,000 trades per day for our clients, nearly a quarter of which come from mobile devices. We have a proud history of innovation, dating back to our start in 1975, and today our team of 10,000-strong is committed to carrying it forward. Together, we are leveraging the latest in cutting edge technologies and one-on-one client care to transform lives, and investing, for the better. Learn more by visiting TD Ameritrade's newsroom at www.amtd.com, or read our stories at Fresh Accounts. Brokerage services provided by TD Ameritrade, Inc., member FINRA / SIPC 1 TD Ameritrade Institutional is a division of TD Ameritrade, Inc., a brokerage subsidiary of TD Ameritrade Holding Corporation Source: TD Ameritrade Holding Corporation