AdvisoryWorld Releases 2nd Annual Risk Management Survey Results; Finds that Majority of Financial Advisors Are Prepared for the DOL Fiduciary Ruling in Advance of the President Elect’s Decision

Surveys 140 Financial Advisors on Their Risk Management Internal and External Processes and Technological Involvement for Second Year in a Row
LOS ANGELES, CA–(Marketwired – Nov 16, 2016) – AdvisoryWorld, the leading provider of investment analytics, portfolio modeling, proposal generation, and customized investment technology for the financial services industry, today released the results of their second annual AdvisoryWorld Risk Management Survey. The October 2016 Survey polled 140 financial advisors nationwide on the impact recent regulatory moves have had on their risk management processes. For the second year in a row, respondents were asked to reflect on their internal risk assessment practices, client and prospect interactions, internal documentation procedures, suitability assessment practices, risk management approach, and their ideal risk measurement technology features.
The 2016 survey found that recent and relevant DOL and SEC moves had a medium to large impact on 55% of the polled advisors’ internal risk assessment procedures. When we polled the same advisor pool last year in July of 2015, only 33% of polled advisors reported the same medium to large impact — a pivotal change in the space of just one year. An 18% increase was recorded in the same impact categories on their external risk assessment procedures with both clients and prospects. Additionally, we found a large increase in advisors augmenting their documentation practices in advance of the DOL ruling, jumping from 38% in 2015 to 69% today.
“When we conducted this survey last year, we were somewhat surprised by the large number of advisors that had not yet started the process of changing their risk assessment procedures in response to the DOL April 2015 announcement,” said Michael Wilson, President and COO of AdvisoryWorld. “We are happy to see that this year’s survey showed an increase in advisors’ preparedness for future regulations through the augmenting of documentation practices and increased technology adoption. Regardless of the President Elect’s decision on the DOL Fiduciary Ruling, it’s clear that advisors’ practices have changed over this waiting period through the adoption of vetted risk assessment procedures and new technology.”
As regulators have increased the focus on suitability and fiduciary duty, the role of technology in advisors’ assessment practices has increased in tandem. More than 95% of the advisors reported that they currently utilize a risk-based assessment approach for analyzing the suitability of investment strategies for both current and prospective clients per SEC and FINRA regulations. In fact, two-thirds of advisors use an integrated technology system such as AdvisoryWorld’s to implement this requirement. Another interesting aspect the survey revealed was that only 50% of advisors enhance their required assessment with the inclusion of clients’ held away assets.
Wilson continued, “The role of technology in the advisory industry has been steadily growing and advisors are still in the process of figuring out what areas of their practice they should digitize. At AdvisoryWorld, we believe that almost every aspect of an advisor’s practice can be improved with technology. From proposal generation and risk assessment to ongoing risk management and client interactions, the tools are available and we encourage advisors to explore all the options available to them. As advisor technology providers, we value anonymous feedback from our advisor-base and look forward to this survey each year. It helps us better serve our clients’ needs, and by sharing the information it helps our clients know where they stand in the industry.”
About AdvisoryWorld
AdvisoryWorld is the leading provider of investment analytics, portfolio modeling, proposal generation technology for the financial services industry. AdvisoryWorld technology is fully customizable to suit a client’s branding and workflow dynamics or can be delivered via off-the-shelf web applications, API, and Professional Services. Founded in 1987, AdvisoryWorld is headquartered in Los Angeles, CA, and currently services over 30,000 investment professionals nationwide. For more information, please visit