More than 1/4 of financial advisers plan to exit industry or merge firms: survey

Financial advisers are feeling heightened pressure from regulators and clients, Natixis finds

Sep 29, 2016 @ 12:59 pm

By Liz Skinner

A quarter of financial advisers are planning a dramatic change in the way they operate their business within the next three years, a new survey found.

About 27% of advisers said they intend to sell their business, merge with another firm, retire or just leave the financial industry altogether during the next three years, according to a survey of 300 advisers by Natixis Global Asset Management.

Regulatory challenges are expected to raise compliance costs over the next several years, and some advisers believe that expense will become increasingly difficult to manage alone. In addition, clients have unrealistic investment expectations and are harder to please, wanting more for less, the survey found.

(More: With mergers poised to increase, are you ready for the next step?)

Advisers face costly challenges at the same time the nation has become focused on lowering investment fees, putting advisers in a difficult position, said John Hailer, CEO of Natixis Global Asset Management for the Americas and Asia.

“Low cost does not always equate to good value, and what's lost in the big picture is the importance of professional guidance and risk management, especially in today's complex and volatile markets,” he said.

Advisers seem to know they need to redirect client focus away from investment performance.

About 87% of advisers peg their success on their ability to demonstrate value beyond asset allocation and portfolio construction, the survey found.


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