Number of Advisers Becoming RIAs Expected to Rise

More than half (51%) say that they find the idea of being an RIA appealing. Younger advisers, in particular, show an interest in independence; 65% of those surveyed who are under age 40 find the idea of becoming an RIA appealing, compared to 43% of those ages 40 and over. 

The top three benefits cited by advisers who find the idea of becoming an RIA appealing include the potential for larger income (56%); the freedom that comes with running their own business (52%); and the ability to place a higher priority on client service and communications (51%).

Eighty-nine percent of those surveyed say that they are more committed to serving their clients than serving their firms. While most advisers view the ability to place a higher priority on client needs and to offer a broader set of investment products and services as potential benefits in joining or starting an independent RIA firm, advisers under 40 are even more likely to see these as benefits.

Perhaps indicating the effect of more years in the business of serving clients, advisers over 40 were more likely than their under-40 peers to believe that clients are more loyal to their adviser than they are to an adviser’s firm, and they were also more likely to think that their clients would follow them if they left to start their own firm.

“The survey results reinforce the client-service orientation of advisers considering independence and the responsibility they feel to meeting their clients’ needs,” said Tim Oden, senior managing director of business development at Schwab Advisor Services. “Also interesting to me is the appeal of the RIA model to advisers under 40, suggesting that the movement to independence isn’t just a flash in the pan; it’s more likely to be a long-term trend."