New survey points to differences in ways advisors and investors see crisis. Some advisors and clients are muddling through this economic dark patch with wildly divergent perceptions of its effect on their relationships. It seems that 38% of advisors feel their relationships with clients have improved over the past six months while only 9% of clients would say the same about their relationships with advisors. Still, the majority of both camps reported that the downturn hasn't had an impact on advisor-client relations.

This comes from a very recent survey of 200 financial advisors of all stripes and about 300 individual investors with at least $100,000 in liquid assets, undertaken by Fidelity "to better understand the impact of the ongoing market turmoil on the advisor-client relationship," as the custodian puts it in a press release.

Another interesting factoid from the study: 32% of the investors polled felt that their advisors had had a hand in minimizing their portfolio losses since the downturn got really ugly in September 2008. On the other hand, about a quarter of them felt that their advisors didn't help staunch their losses, even though they reported portfolio losses for the period that were, on average, 16% ahead of the S&P 500's performance.

Growth in store

When asked how their clients have behaved in the past six months, advisors said investors kept cool and in many cases acknowledged that investment losses were to be expected.

As of about two weeks ago when the survey of clients and advisors was completed, advisors were seeing better times ahead. An overwhelming majority -- 96% -- saw growth in store as a result of market gains, and 49% saw gains coming from clients consolidating assets with them.

Fueling this expected growth, said advisors, are three things: clients' desire for more advice, the fact that clients have more realistic expectations for investment returns, and industry turmoil that has resulted in "weaker competitors" being forced out of competition with them.

"The need for professional investment advice has never been greater," according to Charles Goldman, head of platform strategy for Fidelity's Institutional Wealth Services (FIWS), its National Financial broker-dealer clearing subsidiary and its Family Office Services group. "Advisors of all types have a once-in-a-lifetime opportunity to position their businesses for future growth by focusing on areas such as investment processes, client communication or even talent acquisition."

As it happens, Fidelity has just rolled out a consulting program aimed at helping its institutional clients recruit and retain productive staff members.

And another thing

In another serendipitous flourish, Goldman takes a up a couple of data points from the recent advisor-client survey -- that 52% of advisors said they were reassessing their clients' risk tolerance and 47% are discussing strategies to mitigate risk -- to reiterate Fidelity's commitment to helping RIAs and family offices handle alternative assets.

"There is no doubt that risk management will play a more important role in the advisor-client relationship, especially when it comes to alternative investments," says Goldman. "As broker-dealers and advisors re-assess how they use this asset class, we remain committed to servicing alternatives and see a tremendous opportunity to help support them in this area."

Schwab, Fidelity's biggest rival in the RIA custody and support space, recently said it would stop providing custody for new alternative-asset allocations save to a group of third-party hedge funds on its own platforms.

After some push-back from RIAs, Schwab has extended the cut-off deadline, but has otherwise stuck to its original position on the premise that coming regulatory changes will call for specialized approaches to alternatives custody that it's not equipped to provide.

FIWS had more than $290 billion in end-client assets in custody on behalf of over 3,500 institutional clients at the end of 2008. -FWR

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