RIA Forum: Strategies to help RIAs grow in 2024


Envestnet’s Q4 RIA Forum on December 14, 2023, addressed a variety of factors that will impact 2024 for Registered Investment Advisors (RIAs), including the global outlook, economic trends, market dynamics, and the impact of an election year. Hundreds of RIAs from around the country attended our virtual event, engaging with our panel of speakers for a deeper dive into these themes and more.

The session was moderated by Envestnet’s Brooks Friederich, Principal Director, Investment Solutions Strategy. He was joined by:

  • Dana D’Auria, Group President, Solutions and Co-Chief Investment Officer, Envestnet
  • Dan Phillips, Director, Asset Allocation Strategy, Northern Trust Asset Management
  • Jim Bergeron, Advisor Education Specialist, Nuveen

The year in review

To kick off the conversation, Dana D’Auria provided a market recap of a very interesting 2023, reviewed where markets were at the end of 2022, and talked about changes to portfolio allocations during these times.

Dana focused on fixed income and the AI boom, examining the breadth, participation, and concentration of investment returns this year, along with the Fed’s actions and the investor race toward riskier assets. As we look ahead to 2024, she emphasized that a key factor for a continued bull run will be the extent of participation. Dana questioned whether the top-performing ‘Magnificent 7’ stocks have somewhat plateaued and if the broader market is now contributing more. She noted that despite volatility, the year surpassed many initial expectations.

Future outlook with Northern Trust Asset Management

Looking at 2024, Dan Phillips explained that from a macroeconomic perspective, growth, inflation, and monetary policies are crucial. They relate to the three major risks in any portfolio: market risk, term risk, and credit risk, and he reviewed the macro variables for each in detail.

He noted that wealthier individuals with paid-off mortgages or those with low fixed-rate mortgages were not significantly affected by the Fed’s actions this year. This group makes up about 80% of the country’s consumption. Their financial stability is a key reason why a recession was avoided and why he has a positive outlook for 2024.

Dan reviewed this year’s market growth profile and how he believes investors will benefit from earnings prospects next year. He expects low- to single-digit returns next year and believes things look good from a fundamental level. Dan noted that emerging markets are getting a bit of a boost due to the relaxation of political risks. He expects inflation to come down next year with a focus on the jobs market and the Fed’s interpretation of the economy. He sees investment opportunities in credit, mainly through the high-yield asset class, especially for tax-deferred accounts.

Client conversations with Nuveen

Jim Bergeron suggested that from an overall investment and goals perspective, now is the perfect time to talk to clients about tax-related strategies. Given the asymmetric returns we’ve seen across different asset classes, this is a good opportunity to explore rebalancing client portfolios to align with their risk tolerance structure.

He also recommended maximizing contributions to retirement plans, suggesting clients make additional contributions as they approach retirement age. Jim advised a focus on RMDs by year-end, and for those clients who don’t need this income for lifestyle purposes, he proposed qualified charitable distributions. Additionally, he recommended bunching flexible deductions into one year as another tax strategy.

Considerations for 2024

In response to a question about what to do with cash on the sidelines, Dana highlighted the record levels of assets in money market funds. Advisors should reassess asset allocations and decide whether money should be put into cash to take advantage of current rates. However, Dana cautioned that focusing solely on cash might lead to missed opportunities, as seen in this year’s equity returns. This underscores the risk of market timing and the benefit of staying invested in a diversified portfolio, as staying in the market this year yielded returns that surpassed cash earnings.

Dan weighed in by discussing the geopolitical situation now compared to the past and the risks that could impact fundamentals. He advised that clients inclined toward risk assets should consider natural resources that may benefit from any geopolitical event over the next five to 10 years. He also suggested looking at global real estate for its potential for better growth for risk investors.

When asked how to get clients more comfortable with getting back into markets from a behavioral perspective, Jim highlighted that advisors need to be proactive to avoid missing opportunities. He suggested focusing on municipal bonds for their inherent tax advantages and considering real estate investment trusts to smooth the amount of income subject to taxation.

Jim also discussed family-oriented investment strategies, emphasizing a move away from cash toward options that positively impact the family. He suggested considering annual exclusion gifts to a younger family member, using Donor Advised Funds as a powerful planning tool, and incorporating 529 Plans as part of a gifting strategy. When talking about the U.S. political landscape, Jim referred to the present as the “tax calm before the storm,” anticipating potential tax changes after the 2024 elections. He recommended advisors make the most of the current tax code before any possible changes that might occur in 2025.

Strategies to drive growth

At the close, Brooks Friederich wrapped up the webinar with some final thoughts from Dana about how RIAs can prepare to drive strategies for growth.

  1. Provide more personalization. Many advisors and their clients seek innovation in personalization. Whether in challenging or favorable markets, personalization fosters client discipline. A customized portfolio leads to deeper engagement, allowing for discussions not only about benchmark performance but also alignment with other client goals. Direct indexing offers a scalable solution for incorporating personalization.
  2. Focus on tax management as part of your value proposition. While you can’t control market returns, you can significantly impact tax management. Today, clients expect personalized portfolios with a focus on tax efficiency. Consider tax overlay strategies.
  3. Broaden your offering to include social preferences and sustainable investing strategies. Have a conversation with your clients about integrating their preferences into their portfolios. The ability to personalize a portfolio around social preferences has expanded, so don’t hesitate to explore this discussion. Check out our Envestnet | PMC sustainable investing capabilities.

Thank you to our engaged RIA clients for their thoughtful and strategic questions. We look forward to keeping the conversation going as we head into 2024, and continue to empower growth and productivity for your business.

If you missed our recent RIA Forum, “What to Expect in 2024: Strategies to Help Empower RIAs for Growth,” watch the replay. Or reach out to us at RIASales@envestnet.com.

The information, analysis and opinions expressed herein are for informational purposes only and do not necessarily reflect the views of Envestnet. These views reflect the judgment of the author as of the date of writing and are subject to change at any time without notice. Nothing contained in this piece is intended to constitute legal, tax, accounting, securities, or investment advice, nor an opinion regarding the appropriateness of any investment, nor a solicitation of any type.


FOR INVESTMENT PROFESSIONAL USE ONLY ©2024 Envestnet. All rights reserved.