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5 Things Top RIAs Did Differently in 2020

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Despite the COVID-19 pandemic, several RIA firms were able to adapt to the challenging environment and achieved success last year through various innovative strategies to support their staffs, engage their clients, and drive new business results, according to Charles Schwab’s 2021 RIA Benchmarking Study that was released on Tuesday.

“2020 was a challenging year that became a catalyst for growth,” Lisa Salvi, managing director of business consulting and education at Schwab Advisor Services, told reporters during a virtual media panel held on Tuesday.

The median RIA firm ended 2020 with $439 million in assets under management (AUM), she said, noting that represented a five-year compound annual growth rate (CAGR) of 12.5%, with AUM up 14.5% from 2019. AUM for the median RIA firm is expected to grow to $791 million by 2025, Schwab projected.

Revenue for the median RIA firm ended 2020 at $2.6 million, up 7.5% with the five-year CAGR up 8% and revenue expected to grow to $3.8 million by 2025, according to Schwab.

She also noted that this was the first year in which TD Ameritrade advisors participated in a survey for the annual study. Schwab completed its acquisition of TD Ameritrade in October.

The survey was fielded between January and March, and the study contains self-reported data from 1,340 firms that custody their assets with Schwab Advisor Services or TD Ameritrade and represent over $1.5 trillion in AUM. Study results included RIA firms with $25 million or more in AUM.

In the gallery above are the top five takeaways from the study on how the top RIA firms were able to find success in 2020 despite the challenges they faced.