SEI Survey: Advisors More Optimistic About 2011 Than Their Clients

OAKS, Pa., Jan. 13, 2011 /PRNewswire/ -- Financial advisors are more optimistic about the economy than their clients heading into 2011, according to an SEI (Nasdaq: SEIC) Survey released today. Nearly one-third (30 percent) of advisors said they are "optimistic" heading into 2011; however, only 3 percent of advisors surveyed said their clients were optimistic. The advisor optimism is reflected in stock market projections among this group; more than half of advisors surveyed (60 percent) expect a stock market gain of greater than 7 percent. Advisors are also optimistic that 2011 will be a better year for their businesses than 2010.

"The markets have improved and the consensus in the industry is that things will continue to look up. The challenge for advisors now, is how best to grow their business," said Wayne Withrow, Executive Vice President and SEI Advisor Network Business Unit Leader. "As investor sentiment improves and they look for new investment solutions, advisors need to find ways to attract these individuals. It's critical that advisors have a deliberate strategy for doing this in order to grow their business."

"Across the board, investors are looking for greater clarity about their investments and a deeper understanding of their options. As advisors, that means we have to improve our communication with clients – both in frequency and quality," said Michael Ferman, CPA, Head of Rubin Brown Advisors of St. Louis, Missouri. "The differentiator among advisors will be those who are able to meet this need of increased client communication, without sacrificing other areas of their business."

The survey addressed four key areas heading into 2011: Economic Outlook, Business Outlook, Advisor-Client Relationship, and Top Priorities.

Economic Outlook

From an economic perspective, advisors are more optimistic about 2011 than they were about 2010. More than half of advisors surveyed (60 percent) expect a stock market gain of greater than 7 percent. Market pessimism appears limited to the bond markets as nearly two-thirds (64 percent) of advisors think there is at least a 50 percent probability of a "bond bubble burst." The area of concern for advisors is the Federal deficit. Advisors are mixed on how best to solve the deficit challenge: reduce current stimulus plans (31 percent), revisit healthcare reform (28 percent), or increase the retirement age (16 percent). (Every Friday, SEI's Investment Management Unit publishes market commentary for all audiences, which can be found in SEI's Knowledge Center at www.seic.com/knowledgecenter.)

Business Outlook

Advisors are optimistic that 2011 will be a better year for their business than 2010. The toughest part for 2010 was dealing with the below-expected revenue levels. However, advisors identified positives as well: the market uncertainty provided an opportunity to strengthen relationships, show their real value, and examine existing business processes and procedures. Top goals for advisors to increase revenues for 2011 are to proactively acquire clients using new initiatives (32 percent), increase efforts with centers of influence (25 percent), and continue their existing referral process (21 percent). More than half (55 percent) of advisors said the most important aspect to growing their business is getting referrals from existing clients. An additional measure of optimism was found in that a majority of advisors (73 percent) said they would recommend young professionals consider a career as a financial advisor. Despite the overall optimism, more than half (57 percent) of advisors said that managing business risk right now takes more time than it did during the financial collapse in 2008.

Advisor-Client Relationships

The client-advisor relationship continues to evolve as the need for greater communication increases. The majority of advisors (77 percent) identify this as the area for greatest need, far outweighing the increased need for more reporting (16 percent) or more research (7 percent). Nearly half of advisors (42 percent) said they communicated with clients more frequently in 2010 than in 2009. For 2011, 41 percent of advisors plan to use in-person meetings more frequently. Additionally, advisors continue to rely on third-party vendor information for sharing material with clients, such as investment analysis, financial planning, and other topical issues. More than half (58 percent) of advisors utilize such material. Social media remains a limited tool to reach new clients – only 11 percent of advisors currently use this method.

Top Priorities

Top priorities for advisors in 2011 are to create better work-life balance and improve processes and procedures. When asked how a professional coach could help them, the most popular choices were new business development, marketing and public relations, and business organization and staffing. Similarly, the top three New Year's Resolutions for 2011 among advisors are: spend more time on growth activities, remember what really matters in life, and segment clients and service them differently based on profitability.

The poll, conducted by the SEI Advisor Network, surveyed 367 advisors during December 2010 and January 2011. Nearly two-thirds of respondents (61 percent) have spent at least 15 years as an advisor.

About The SEI Advisor Network

The SEI Advisor Network provides financial advisors with turnkey wealth management services through outsourced investment strategies; administration and technology platforms; trust, banking, and institutional services; and practice management programs.  It is through these services that SEI helps advisors save time, grow revenues, and differentiate themselves in the market.  With a history of financial strength, stability, and transparency, the SEI Advisor Network has been serving the independent financial advisor market for more than 16 years, has over 6,000 advisors who work with SEI, and $30.4 billion in advisors' assets under management (as of Sept. 30, 2010).  The SEI Advisor Network is a strategic business unit of SEI. For more information, visit www.seic.com/advisors.

About SEI

SEI (Nasdaq: SEIC) is a leading global provider of outsourced asset management, investment processing and investment operations solutions. The company's innovative solutions help corporations, financial institutions, financial advisors, and affluent families create and manage wealth. As of September 30, 2010, through its subsidiaries and partnerships in which the company has a significant interest, SEI administers $402 billion in mutual fund and pooled assets and manages $164 billion in assets. SEI serves clients, conducts or is registered to conduct business and/or operations, from numerous offices worldwide. For more information, visit http://www.seic.com.

SOURCE SEI