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How Indie Advisors Plan to Grow in the Next 5 Years: Schwab

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What You Need to Know

  • Sixty-nine percent of advisors say they have a strategy in place to continue to grow at their current rate or faster.
  • The top growth driver is acquiring new clients.
  • Portfolio personalization is increasingly important to investors, according to Schwab's Jon Beatty.

The independent advisory industry can look forward to continued growth over the next five years, according to a study released Wednesday by Schwab Advisor Services.

Ninety-three percent of RIAs surveyed said they expected growth to continue, with a projected 17% uptick in terms of the average net new assets expected per year over this period. 

Sixty-nine percent of advisors reported that they had a strategy in place to continue to grow at their current rate or faster. The top growth drivers: 64% said acquiring new clients, and 57% said attracting new clients who began investing in the past 18 months. 

They plan to do this through a combination of working with clients to reach the next generation, increasing use of technology, recruiting younger advisors and offering new solutions and services. 

Thirty-six percent of advisors said they expect growth to come from building relationships with centers of influence and driving referrals, and 34% from growing relationships with current clients. 

Logica Research conducted the online study from Oct. 12 through Oct. 28 among 723 independent investment advisors who custody assets with Schwab or TD Ameritrade Institutional, representing a total of $291 billion in assets under management. 

Growth Levers 

Although most firms in the study are optimistic about growth prospects, the findings show that firms emphasize different levers to achieve it. 

Some focus on organizational structure, attracting and retaining talent, and anticipating skill sets essential to supporting growth that they will need for the future. 

Others will make investments in sales and marketing to actively create strategies to meet target client needs. 

Still others will target client personas, creating strategies to meet clients’ needs, and identifying specific client segments for expansion. 

Getting Personal 

Fifty-two percent of study participants believe that investors are looking for added personalization in their investment portfolios over the next five years. 

Thirty-eight percent said millennial clients will lead the way among those seeking personalization. Twenty-six percent predicted that baby boomers would lead the way, 22% said Generation X would do so and 10% said it would be Gen Z.

“Personalization is a growing part of every industry, and it is particularly important to investors,” Jon Beatty, chief operating officer of Schwab Advisor Services, said in a statement. “More people are asking questions about how, where and why they invest, beyond the basic goal of wealth accumulation.” 

Beatty noted that clients increasingly expect their needs and values to be understood and to have access to financial solutions that align with them.

“The advisor/client value proposition has its foundation in a personalized understanding of the client, and the emergence of new tools and investment solutions to put values into action is opening a whole new opportunity for RIA firms,” he said. 

The vast majority of study participants appeared confident that they will be able to scale the delivery of personalized investment solutions. Fifty-nine percent said they will look to adapt by finding new ways to build and maintain relationships with clients. 

Fifty-six percent said they will employ better tools or approaches to assess clients’ needs and values, and 51% will provide education about investing to the whole family. 

Talent Conundrum 

Nine in 10 surveyed advisors reported that their talent strategy reflects the needs of their current client base. Three-quarters said they are in hiring mode to ensure that they have the skill sets they will need in the future.

Although 66% of firms have a clear talent strategy in place to help them grow, 37% said that finding talent is their top challenge. Other areas of talent management were less pressing for most advisors: 11% cited managing people, 9% ongoing training and development, 9% building a cohesive culture and 9% knowing how to compensate and reward talent. 

What this comes down to, the study found, is that finding, developing and retaining talent is the second leading barrier for advisors’ optimistic outlook on overall firm growth, between the top one, balancing time and priorities, and creating operational efficiency. 

According to the study, about half of firms focus their recruiting efforts within the finance industry itself. The other half is branching out into areas including sales, communications and technology. 

Among the top five attributes respondents said they seek in recruits, in order of importance, are work ethic, attention to detail, team player mentality, ability to communicate with clients in person and commitment to the firm. 

“We all have so many things constantly vying for our attention, not to mention so many options for managing our finances,” Beatty said. “By keeping the attention of clients and engaging with them, the relationship itself helps drive growth. And it is people who sit at the heart of these valuable relationships.” 


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