Cybersecurity, markets and fee pressure top RIA concerns

Survey finds regulation to be a lesser worry, with firms split over impact of DOL rule

Mar 9, 2017 @ 2:40 pm

By InvestmentNews

Cybersecurity and the possibility of a market correction are at the top of the worry list for executives of investment advisory firms.

One-hundred percent of the RIA firm leaders surveyed by their trade group, the Investment Adviser Association, and Boston-based research firm Cerulli Associates said that they were either moderately or very concerned about those two issues over the next 24 months, compared with 82% who felt the same way about fee compression and regulation.

The majority put a priority on near-term investments in technology to address cybersecurity concerns (89%), to improve data management and analytics (76%), and to implement regulatory/reporting requirements (76%).

Executives at RIA firms were split over the impact of the DOL fiduciary rule, whose future is now in doubt. More than a third – 38% – see it as the single biggest opportunity for increasing business over the next 12 months, while 21% cited it as a significant threat to business, the survey found. Similarly, 31% saw robo/digital advice platforms as a threat, while 17% saw them as an opportunity.

In general, the survey found that firm executives were optimistic, with 63% planning to add to their workforces over the next 12 months. They also were virtually unanimous (98%) in identifying development of the next generation of talent as the most important initiative for ensuring firm profitability.

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