According to the study, which surveyed 158 RIAs with an average of $234m in client assets under management, a plurality of advisors reported having more assets under management (43%) and more revenues (40%) relative to six months ago. Only 22% of advisors reported their total assets under management as lower relative to six months ago, while 25% reported that their revenues decreased.
The average RIA surveyed by TD Ameritrade saw their client assets under management grow by 8.4% and their revenue grow by 8.5%.
The results illustrate just how quickly financial fortunes can ostensibly change in the RIA industry, as US equity markets return to record highs. In the late first quarter and early second quarter of 2020, more than 1,400 firms classified as investment advisory businesses applied for forgivable Paycheck Protection Program (PPP) loans from the federal government as the uncertainty of the pandemic roiled markets.A majority of respondents (58%) said that they had added clients over the past six months.
‘The saying, “Keep calm and carry on” has served advisors well during these unprecedented times, as they help their clients — and themselves — make sense of, and adapt to, current events that are impacting their long-term goals,’ said Vanessa Oligino, a managing director of business performance solutions at TD Ameritrade Institutional. ‘The results show that investors want financial guidance they can trust, which is why RIAs are growing even as they are having to pivot rapidly and in some cases, rethink large portions of their operations.’
Dealmaking sentiment among respondents was high. Roughly 27% of respondents said that they will likely buy another firm, while 5% said they will likely sell an equity stake to an outside party and an additional 4% said they are likely to sell their business entirely.
In all, a plurality of RIAs (42%) said they expected the pace of dealmaking to increase in the second half of 2020. Roughly 37% expected the pace to remain the same and only 8% projected a decrease.
