Despite fears they might lose clients when going independent, 79% of advisors who switched to the indie model in the last two years say the majority of clients stuck by their side, Schwab Advisor Services reported Tuesday.
Forty advisors interviewed by Koski Research for Schwab Advisor Services in February and March said that client retention was one of their top three concerns when they moved to the independent model. Yet these advisors in their “sophomore” year who custody with Schwab said that not only did their clients agree to make the transition with them, but 60% were immediately on board when told about the change.
“As one of the fastest growing segments of the financial services industry, it is clear that the appetite for independent advice is expanding as more and more advisors turn to the RIA space,” said Jon Beatty (right), senior vice president of sales and relationship management with Schwab Advisor Services, in a statement. “With industry growth comes more choice for advisors as they seek out a path to independence.”
Schwab cites industry research by Cerulli Associates that finds that the RIA industry has seen an 8% annual growth rate, more than doubling industry assets under management to $2.8 trillion from $1.3 trillion over the past 10 years.
Move to Indie Model Takes About Two Years
From the initial thought to the actual move, it took an average of two years to go independent, according to the interviewees, who have worked in the industry for 15 years on average and manage a median $100 million in assets.
Freedom, control, independence and personal service were the words they used to describe what they were looking for when they decided to make the move.