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Technology > Marketing Technology

Future Looks Bright to RIAs: Schwab Survey

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Registered investment advisors are optimistic about 2016. Ninety-seven percent of advisors participating in Schwab’s latest Advisor Outlook Survey expect their businesses will grow in the coming year. While half anticipate growth between 5% and 10%, about one-third expect double that range and 15% anticipate even stronger growth.

“Advisor optimism around the RIA firm growth continues unabated,” said Bernie Clark, head of Schwab Advisor Services, in a statement released along with the study during Schwab’s annual Impact conference in Boston. “Future opportunities are significant, including $23 trillion in assets outside the independent channel households with $500,000 or more in investible assets.”

On the first day of the Schwab conference, CEO Walter Bettinger told the crowd he hopes some of those assets “shake loose” from traditional firms and move to financial advisors to oversee.

Advisors who participated in the Schwab study were also confident about the future performance of the stock market despite market volatility. Sixty-seven percent of advisors predicted gains in the S&P 500 in the next six months while even more, 97%, anticipate continued market volatility and 80% expect pressures on U.S. markets from geopolitical events and global markets.

The study was conducted between Sept. 9 and 18, when the S&P 500 gained 16 points and the Dow Jones industrial average rose 131 points.

Continued market volatility wasn’t the only challenge that advisors mentioned. Forty-one percent of study participants cited challenges from a more complex compliance environment, while slightly fewer listed technology integration (39%) and business operational needs (37%) as major challenges to business growth.

Many advisors viewed technology as a catalyst for growth. Among those advisors who are comfortable with robo-advice, 70% would recommend it for clients who don’t meet their firm’s investible asset minimum, and 54% favor it for the children of existing clients to help them attract new and future clients.

More than one-third of advisors said that up to 10% of new client assets in the next year would likely be appropriate for automated advice, and 21% said a greater share of assets would make that cut.

“Technology is no longer simply equated to productivity or back-office data management,” Clark said. “Technology is a growth enabler.” Schwab’s Intelligent Portfolios, its RIA robo-advisor offering, introduced in March, had $4.1 billion in assets – both retail and institutional — as of the end of September. 

Close to two-third of advisors said changes in technology were having a greater impact on their firms than changes in client demographics.

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