Holistic wealth management services give advisory firms better pricing power in the market, according to the findings of the poll.
Some of the nation's largest financial advisory firms are realizing a competitive edge by bringing new and value-added services, such as tax planning, alternative investments and private banking solutions, to investors, according to an online poll of attendees at this year's Elite Advisor Summit held by BNY Mellon's Pershing Advisor Solutions.
The 2018 Elite Advisor poll, conducted as part of the two-day, invitation-only event, also revealed that leaders of some of the country's most preeminent registered investment advisors (RIAs) and institutional firms are not receiving pressure from clients to adjust their fees.
This year's Elite Advisor Summit took place in Dana Point, California, March 7-9, and featured sessions on topics ranging from M&A trends and business growth strategies to portfolio construction and talent development. Average assets under management represented by firms at this year's event were $4.2 billion.
Key highlights from the Elite Advisor poll include:
Fees remained steady in 2017
A significant majority (84 percent) of advisors responding to the poll indicated they did not change their pricing in 2017. Among those who changed fees, 10 percent reported an increase.
Further, more than half (58 percent) of the respondents said they are not getting increased pressure from clients to reduce fees.
"These findings are in-line with our previous studies on the topic and what we are hearing from clients," says Gabriel Garcia, managing director at BNY Mellon's Pershing Advisor Solutions. "Our experience is that those advisors who demonstrate value beyond asset management and basic investment counseling not only maintain prices but are also better positioned to drive growth in the long term."
To that end, a majority (58 percent) of respondents indicated that offering holistic wealth management services, such as estate and tax planning, private banking, is the most important factor in giving them better pricing power in the market, followed by strong brand recognition (32 percent).
Tax planning: The most sought-after service
When asked about the top three areas that are driving business growth right now, respondents highlighted the following:
- Tax planning (74 percent)
- Alternative and philanthropic investments (tied at 61 percent)
- Private banking solutions (52 percent)
"Tax planning has become table stakes for advisors serving clients with complex needs," says Garcia. "Increasingly, these advisors are looking at the entire balance sheet and income statement of clients to identify ways to optimize their wealth. In that regard, it is not surprising to see tax planning, along with private banking, jump to the top of this list.
"We are also witnessing growing interest in alternative and philanthropic investments, as investors look for new investment strategies to help preserve and grow wealth, and build a lasting legacy."
Marketing has the potential to be the biggest driver of growth; while talent continues to be the biggest challenge
About a third (29 percent) of respondents said developing an impactful branding and marketing strategy will be the biggest driver of growth for their business in 2018. Trailing narrowly was implementing new technologies and solutions (26 percent).
Talent continues to be a key issue for the industry, with more than a third (36 percent) of respondents indicating that hiring and developing talent will be the biggest challenge for their business in 2018. Talent was noted as the top challenge in last year's poll as well.
"Talent shortage is the single biggest threat to our industry," says Mark Tibergien, CEO of BNY Mellon's Pershing Advisor Solutions. "Today's workforce is looking for job opportunities that offer a clear career path, a strong workplace culture and ongoing development opportunities. Growth-minded advisory firms need to do more to invest in the future and develop a human capital strategy that will help attract those with a passion for impacting the lives of others."
About the Elite Advisor Poll
The Elite Advisor poll was conducted between February 22 and March 9, 2018, among the Elite Advisor Summit attendees. The poll was completed by 31 of the 71 advisors that attended the summit. Full findings of the poll can be found here.
About the Elite Advisor Summit
The Elite Advisor Summit, hosted by BNY Mellon's Pershing Advisor Solutions, is a two-day, invitation-only event with some of the country's most preeminent executives of RIAs and institutional firms. The event is designed to help advisory firms compete in today's fast-changing environment and facilitate meaningful conversations, ideation and networking. The inaugural Elite Advisor Summit was held Feb. 28 – March 2, 2017, in Aventura, Florida.