This year started off well for RIA firms, according to Schwab’s annual benchmarking study, released Thursday.
RIA firms with up to $100 million in assets under management reported five-year compound annual growth rates of 7.7% across both assets under management and revenue, and 4.6% growth in number of clients.
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Schwab fielded the study from January to early April. It contains self-reported data from 1,010 firms that custody their assets with Schwab Advisor Services and represent $1.1 trillion in assets under management.
More than three-quarters of firms completed the study after March 1, when markets had already been heavily affected by the coronavirus crisis, Schwab said.
The top strategic priorities for firms with up to $100 million under management have remained consistent year over year, according to the survey: acquiring new clients and improving satisfaction for existing ones.
A continued focus on net organic growth has helped RIAs of all sizes smooth the effect of volatile markets. For those with up to $100 million in assets, organic growth contributed two times more to overall asset growth than it did for firms managing more than $250 million.
In other survey findings, RIA firms with up to $100 million in assets reported that their new-to-firm assets in 2019 were more than three times higher than new assets from existing clients.
Client attrition remains low for RIAs overall, the survey found, and especially for firms in the survey sample: 2.5% versus 3.5% for firms with more than $250 million in assets.
Thirty-eight percent of firms managing up to $100 million identified marketing strategy as the main area of their businesses that could benefit from outside help. Compliance followed, cited by 34%.
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