RIA firms with $1 billion or more in assets under management reported robust five-year compound annual growth rates of 9.2% in assets under management, 7.4% growth in revenue and 4.4% growth in number of clients, according to Schwab’s recently released 2020 benchmarking study.
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.
Schwab earlier reported that RIAs with up to $100 million under management had also reported strong returns for the five-year period.
The chief strategic priorities for firms with $1 billion or more in assets have remained consistent year over year, the study showed: acquiring new clients and using technology to improve productivity.
The study’s findings showed that larger firms were likelier than their peers to leverage technology to serve clients more consistently and streamline communications.
Firms with $1 billion or more in assets under management were also more likely than those with between $250 billion and $1 billion under management to have in place written strategic plans — 72% versus 62% — and succession plans — 67% versus 58%.
In 2019, firms with $1 billion or more in assets reported that their new-to-firm client assets were 4.1 times higher than new assets from existing clients, a median $66 million versus $16 million.
Thirty-three percent of RIAs with $1 billion or more under management identified marketing strategy as the top area of their businesses that could benefit from outside help, while 32% cited growth strategy and 27% staff training in sales and business development.
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