Advisors Optimistic About Business Growth Over Next Five Years (Russell.com)

Advisors Optimistic About Business Growth Over Next Five Years
Referrals and Organic Growth Key; Marketing/Networking an Untapped Opportunity

TACOMA, Wash. — July 13, 2005 — A poll of registered investment advisors (RIAs) who attended Russell Investment Group's annual conference in April indicated that they predict their businesses will grow steadily over the next five years. Of the 51 RIAs who responded to the poll, 41% said they expect between 11% and 20% annual growth in assets under management over the next five years, and one-fifth (20%) predict annual growth between 21% and 30%.

"We know that investors are actively seeking advice to help them with their financial goals and we are pleased to see this trend being reflected by the confidence of these advisors in the ongoing growth of their businesses," said Craig Wainscott, director of knowledge capital for Russell's U.S. Distribution group. "Consistent, measured growth is the basis for any advisor's success and our experience with advisors has shown us that the right balance of product/service offering, client relationship management and hands-on support from a firm they trust can enable them to achieve sustained growth over the long-term."

The majority of advisors (80%) considered referrals the key driver of growth in the next five years in addition to organic growth within their existing client base (69%). More than half (59%) of the RIAs also responded that increasing marketing/networking would help them achieve their growth goals. This result points to a potentially untapped opportunity given that a third of the RIAs (33%) said they currently spend less than an hour per day on marketing/networking-related activities, and an additional 50% said they spent only one to two hours a day on this. Meanwhile, almost one-third (27%) indicated they are spending three to four hours a day on administrative tasks.

"It's not surprising that advisors who are trying to balance their client responsibilities with the burdens of the day-to-day administrative duties involved in running a business are having difficulty carving out time to market themselves and effectively network," says Steve Moore, director, practice management, for Russell's U.S. Distribution group. "We try to help advisors focus on targeted ways to demonstrate their unique value — especially in the current market context where investors need them more than ever. For an independent advisor especially, learning how to leverage existing client contacts and taking advantage of word-of-mouth and other viral marketing opportunities is crucial to building their business."

Overcoming Challenges
While advisors indicated marketing/networking was important for ongoing growth, almost half (48%) listed marketing/networking as being one of the key challenges they face. In addition, 63% of the advisors polled cited time management and 48% cited finding and managing staff as other challenges.

"We have been working with advisors for more than 20 years and we get clear signals from them about the challenges they consistently face when it comes to not just being a good financial advisor but also a successful business owner," said Wainscott. "Our role is to enhance the advisor's own investment discipline while trying to help them focus on their strengths — managing the individual needs of clients, networking for growth, building the right team of people and building their own brand of service excellence."

About the Poll
Of the advisors polled, 33% had 5-10 years of experience, 33% had 11-20 years of experience, 10% reported having less than five years experience and 24% reported having more than 20 years experience. The total assets under management spanned from under $25 million (12%) to more than $500 million (16%).

About Russell
Russell Investment Group, a global leader in multi-manager investment services, provides investment products and services in more than 39 countries. Russell manages more than $133 billion in assets for advisory clients as of March 31, 2005, and provides other financial services to clients worldwide representing more than $2.3 trillion. The company is one of the top five companies in DALBAR's 2004 Financial Professionals "General Opinion" survey and ranked second on Forbes Magazine's Great Place To Work Institute's 2004 list of Best Small & Medium Companies to Work for in America.

Founded in 1936, Russell is a subsidiary of Northwestern Mutual and is headquartered in Tacoma, Wash., with additional offices in New York, Toronto, London, Paris, Singapore, Sydney, Auckland and Tokyo.

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Contact:
Jennifer Tice 253-439-2921

Russell Investment Group is a registered trade name of Frank Russell Company, a Washington, USA corporation, which operates through subsidiaries worldwide. Frank Russell Company is a subsidiary of The Northwestern Mutual Life Insurance Company.

Russell Fund Distributors, Inc., is the distributor of Frank Russell Investment Company.

First Used July 2005. RFD 05-5167