3 Insights From the Fidelity RIA Benchmarking Study
Fidelity conducted an RIA Benchmarking Study to identify and analyze key performance metrics for RIAs. The intended goal was to evaluate individual performance rates and provide recommendations for improving revenue streams and growing clientele.
Specifically focused on business development activities, an online survey went out to 211 RIA firms in March 2021 and asked about their on-the-job experiences within the 2020 COVID pandemic landscape. Perhaps surprisingly due to 2020’s economic uncertainty, growth trends continued and profitability reached new overall highs.
However, there were also plenty of findings that translate into actionable recommendations for RIAs wanting to grow business and stay competitive in a post-COVID world. Here’s what researchers found.
Outsourcing Key Operations Can Be a Good Option
Finally, outsourcing is becoming an increasingly attractive option to firms that participated in the 2021 study. In early 2022, the U.S. Securities and Exchange Commission (SEC) released new proposed regulations that heighten firms’ responsibilities to clients in the case of a cyberattack. Increased reporting of cybersecurity incidents and public disclosures that exist up to two years after the breach itself reflect the federal government’s elevated attention to cybersecurity attacks and the emphasis firms should be placing within their organizations on the issue.
Experts recommend the adoption and implementation of tech platforms that can mitigate risk and report transparently on potential security breaches. Not only does this fulfill federal regulations, but it also can serve to reassure customers that their information and assets are safe (or as safe as possible in an increasingly hack-happy world). Existing business intelligence systems can be supplemented with newer digital solutions that provide better data aggregation and visibility into perceived threats.
In the 2021 study, researchers found that 9 in 10 firms tend to hire outside consultants when it comes to compliance and cyber-safety. This trend is positive as it indicates that organizations are willing to recognize their own weaknesses in these ever-evolving spaces and increasingly turn to the latest up-to-date, industry-proven expertise. This both protects firm liability in the face of a cyberattack while also securing customer assets and information.
Overall, the 2021 Fidelity RIA report highlighted trends that all financial organizations should be aware of going into 2022. Failing to act in key areas such as customer service, digital transformation, and enhanced cybersecurity efforts can impede future financial earnings and hurt consumer trust. Ultimately, this report’s findings provide an ad hoc roadmap for forward-thinking businesses wanting to succeed in a world very different from the one that existed five years ago.