Independent registered investment advisers (RIAs) are very optimistic about the industry, their firms and their future, according to Charles Schwab’s “Independent Advisor Outlook Study.” Nearly a quarter (23%) say that the bull market of the past six years has helped them attract new clients, provide higher adviser compensation (16%), enabled them to invest more capital to grow their firm (13%) and consolidate client assets (13%).
Nearly all, 93%, of RIAs believe the industry will continue
to grow, with 90% saying the RIA industry has not yet fully matured and 53%
believing the industry will outpace the growth of the investment markets.
Eighty-two percent also believe the U.S. economy is improving.
The survey also found that 70% of RIAs believe technology helps them improve customer services, creates efficiencies that make them more profitable (67%) and enables them to spend more time with clients (64%). Nearly half, 48%, said they would use an automated investment management system to target younger investors or investors with less than $100,000 in investable assets (43%).
While most firms (77%) believe they offer holistic wealth management, they typically concentrate on only three areas: investment management (97%), tax-efficient planning (77%) and long-term financial planning (76%). A number of other financial services are considered secondary, value-adds—including financial planning for children, estate planning, charitable giving, health care planning, real estate management, tax preparation and filing, and advice on alternative investments.
“The independent model is resonating with both investors and with advisers, and this is driving the dramatic growth we have witnessed to date and expect to continue in the decade ahead,” says Bernie Clark, executive vice president and head of Schwab Advisor Services. “It’s clear that the environment in which we operate is changing. From emerging clients and the next generation of advisers, to new technologies that change the way firms work, RIAs have the opportunity to capture an increased share of the affluent market and to take decisive actions now to lay the groundwork for their firm well into the future.”
Technology will continue to play an important role in RIAs’ businesses, Clark says, not only to attract new clients but to expand their practices and create efficiencies.
The report is based on responses from 629 RIAs with $229 billion in assets under management custodied with Schwab. The full report can be seen here.