Advisors expect markets will decline this year but are bullish on their firm’s growth trajectory over the next five years, according to Schwab’s latest Independent Advisor Outlook Study.
The “apparent disconnect is explained by advisors indicating they are diligently prepared,” according to the study, which surveyed 924 independent investment advisors who custody assets with Schwab.
Advisors are making strategic investments to promote sustained growth regardless of the market environment while doubling down on pursuing new clients and serving the ones they already have, the study notes.
They are streamlining operations, updating technology and increasing sales and marketing efforts to protect their businesses when the recession comes.
Over 90% plan to invest in existing and new technology this year in order to build scale, reduce manual work and free up employees to focus on high-value work.
Their average expected growth rate over the next five years: 41%, but 21% of small firms with $500 million or less in assets and 14% of large firms with more than half a billion in assets are expecting a growth rate nearly double that, 76%.
Advisors also expect an increasing preference of investors for the independent fiduciary model over the traditional wirehouse model will help boost growth while robust RIA platforms and technology systems make it easier for them to go independent.