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.