Schwab: 11 Things Top RIAs Did Better Than Rivals in 2022

Although last year represented “such a challenging time,” the registered investment advisor sector remained healthy, according to Lisa Salvi, managing director of business consulting and education at Schwab Advisor Services.

That was especially true for what Schwab refers to as the “top performing firms” — those that rank in the top 20% of its Firm Performance Index.

Despite 2022’s challenges, RIA client growth “remained quite healthy” and was up 6% from the prior year, “in line with the five-year annualized growth rate,” Salvi told advisors and reporters on Thursday, during a webcast highlighting results of Charles Schwab’s 2023 RIA Benchmarking Study, released the same day.

Meanwhile, “even though there’s some pressure” on assets under management, RIAs are “still able to attract quite a few new clients,” she said, adding: “When we look at the five-year AUM, revenue” and client compound annual growth rates, “results show that the RIA industry continues to be strong and we know that demand for advice is not going anywhere.”

Addressing advisors about last year’s challenges, Salvi said: “The S&P 500 was off 20%, U.S. Treasurys ended the year in the red, there was volatility in the market conditions, inflationary pressures [and] geopolitical uncertainties. All of this took a toll on investor confidence. It created a lot of headwinds and probably quite a few conversations that you were having as you helped your clients through these challenging times.”

The RIA sector “continues to demonstrate strong long-term results, despite a challenging 2022,” according to the 2023 study.

The median RIA firm ended 2022 with $455 million in AUM, the study said. That was down 71% from 2021 but led to a five-year CAGR of 10%, according to Schwab.

The median RIA firm ended 2022 with $3.1 million in revenue, up 4.1%, with a five-year CAGR of 10.8%. Meanwhile, the number of clients for the median RIA firm was 314, up 6.2%, with a five-year CAGR of 6.2%.

“We continue to see really great participation” in the annual study, Salvi also said, noting over 1,300 advisory firms, representing $1.7 trillion in assets under management, participated this year.

The 2023 RIA benchmarking study was fielded in the first quarter of this year and reflects responding firms’ business results for the 2022 calendar year, she noted.

In the gallery above are 11 ways the top 20% of RIA firms stood out from competitors, according to Schwab.