Looking at the distribution of expenses by range, we do not see much in the way of forecasted changes in 2016. The lowest tier, under-$50,000, represents 43% of advisors in 2015 and is expect to drop slightly to 40% this year. In analyzing the breakdown of expenses by category, for which we did not request a forecast, we display the results from last year’s survey for comparison purposes. The most noteworthy difference is in the professional and advisor compensation response, at 31% of total expenses in 2015, down materially from 40% in 2014. As noted in the Practice Management and Operations chapter, it does appear that RIAs are expanding their service offerings and on average, may have sacrificed some of their own compensation in 2015. Indeed, every other category, except for benefits and payroll taxes, represents a higher share of total expenses than the prior year. This implies that RIAs have had to incur additional expenses to support an increase in the services they provide to drive revenue growth in a generally flat market environment.
