Advisors Balance Independence and Business Development
The intense competition in the investment management market has put pressure on asset managers and distributors alike. Asset managers work to justify their management fees in a commoditized market, while the challenges of managing and growing a practice encourage financial advisors to orient their value proposition around tasks other than investment management. This pressure, together with a long-term shift toward independent channels and an aging advisor workforce, could work to the benefit of both parties, as asset managers seeking distribution partners find themselves in contact with advisors looking to outsource more.
Growing advisors’ business
ISS MI examined practice management issues facing advisors in the latest edition of its Advisor Pulse Series, which surveyed over 500 advisors in February 2025. The greatest challenges facing advisors will be familiar to those working across a variety of industries. Advisors were most likely to cite “new client/business development” when asked about their top challenges in managing their practice. 26% of them cited this as their top challenge, with 52% citing it as one of their top three. The table below displays the five highest-ranked challenges. Compliance and asset growth followed as the next highest-ranked hurdles at 14% and 12%, respectively.
Figure 1: New Business Development Stands Out as the Top Challenge for Advisors
Advisor responses to top three challenges in practice management, February 2025
Source: ISS MI Advisor Pulse – March 2025
Not all channels felt these concerns equally, however. Acquiring new clients was still the chief challenge for wirehouse advisors, though not to the same degree as other channels. A mere 19% of wirehouse advisors said this was their top challenge, compared to 27% of regional, independent, and bank broker-dealers and a much stronger 34% of registered investment advisors (RIAs). The magnitude of this concern appears to increase with the relative independence and self-reliance of these channels. Wirehouse advisors are able to benefit more from the extensive services and resources offered by their centralized firms. These allow wirehouse advisors to provide clients with a larger suite of offerings and first-class experiences, which have served to attract more ultra-high-net-worth (UHNW) clients to the channel.
Drilling down into advisors’ specific concerns around business development reinforced how those resources can benefit wirehouse advisors. When asked about the greatest difficulties related to new client development, 50% of advisors overall cited finding suitable clients as their top challenge, with 66% listing it as one of their top three. This was marginally less of a concern for wirehouse advisors thanks to their improved ability to attract UHNW clients. 44% cited this as their top challenge compared to 53% of broker-dealers and 48% of RIAs.
Six times each year ISS Market Intelligence (ISS MI) surveys Advisors across the country to understand the advisor decision making process and their perceptions of firms across the asset management industry. Read more about leading challenges facing advisors, including staffing and succession planning, in the latest edition of ISS MI’s Advisor Pulse research series as well as in the inaugural issue of the Windows into Wealth Management report.
By: Alan Hess, Vice President, ISS Market Intelligence
