Independent registered investment advisors (RIAs) have a pronounced sense of optimism about the state of the industry, their firms and the future, according to the latest Independent Advisor Outlook Study (IAOS) from Charles Schwab.
RIAs report that the bull market of the past six years has contributed positively to firm growth across areas including attracting new clients (23 per cent), providing higher advisor compensation (16 per cent), creating more capital to invest in firm growth and operations (13 per cent), and driving the consolidation of client assets (13 per cent). From this position of strength, 93 per cent of RIAs believe the industry is on a continued growth trajectory, with more than half (53 per cent) saying the industry has not fully matured and will continue to grow at a faster rate than the market.
The IAOS results reflect responses from 629 RIAs representing USD229 billion in assets under management (AUM) custodied with Schwab and found that advisors are taking steps across a range of strategic and operational fronts to support their growth and set their firms up for success in the future. Looking at the next five years, the top three priorities for growth are adoption and integration of new technology, differentiation of their firms in the market, and adding staff.
“The independent model is resonating with both investors and with advisors, and this is driving the dramatic growth we have witnessed to date and expect to continue in the decade ahead,” says Bernie Clark, executive vice president and head of Schwab Advisor Services. “It’s clear that the environment in which we operate is changing. From emerging clients and the next generation of advisors, to new technologies that change the way firms work, RIAs have the opportunity to capture an increased share of the affluent market and to take decisive actions now to lay the groundwork for their firm well into the future.”
