Registered investment advisors surveyed by TD Ameritrade Institutional say that their top source of new clients continues to be dissatisfied investors fleeing major Wall Street firms. The client migration mitigated the drop in revenues at RIA firms, which nevertheless averaged approximately 30% to 40% in 2009, according to TD. But as RIAs gear up to grow their practices this year, they are doing more than scooping up unhappy wirehouse clients. They have identified three major strategies to increase business in 2010: increase spending on marketing, buy more technology and improve client service.

The study, Preparing for Growth in the New Era of Delivering Financial Advice, canvassed 507 RIAs by phone in December 2009. Back then, many advisors had opened their wallets. For example, 64% of respondents polled by the Jersey City, N.J.-based company said they had increased spending on marketing, up from 53% in September 2009. "It is a time for them to take advantage of opportunities," says Brian Stimpfl, managing director of advisor advocacy and industry affairs at TD Ameritrade Institutional. "They are getting better at growing their business through referrals." In fact, 60% of advisors say they are adding clients, despite not having a well-known brand.

In addition, 61% of advisors increased spending on technology to streamline back-office operations and boost efficiency. In 2010, they are looking to buy portfolio management and customer relationship management software. They plan to upgrade existing systems (55%), purchase new technology (48%) and provide ongoing training for their staff (41%).

Running a successful practice takes more than a marketing budget and streamlined processes. According to the study, 42% of advisors plan to take steps to improve client service in 2010. In 87% of the instances in which investors leave their advisors for another, it is because of poor service, TD says, citing a 2008 study performed by San Martin, Calif.-based CEG Worldwide. Respondents from the TD survey say that in 2010, they will proactively contact clients more often (52%).