Report Offers RIA Firms Tips for Snatching Up Advisers

The latest whitepaper from Charles Schwab Advisor Services tackles how registered investment advisers (RIAs) can recruit the growing number of advisers going independent.

The Schwab Market Knowledge Tools (MKT) whitepaper, “Recruiting Advisors Turning Independent,” uses real-life stories about how three firms with different growth strategies brought on board advisers who fit with their business plan. The report also outlines the considerations RIAs should take into account when developing their recruitment strategies:

  • Business strategy: Conduct a thorough assessment of the firm’s long- and short-term business goals, core values, and the personal objectives of the principals to clarify the types of candidates who can further the firm’s core mission and strategic goals.
  • Compensation and equity: Regardless of whether new talent is brought on as an owner or as an employee, the compensation negotiation must be consistent with the firm’s existing compensation philosophy, be competitive with the market, and be specific on incentive pay and ownership issues.
  • Recruiting and cultural fit: RIA principals first need to understand the most important aspects of their firm’s culture before they can determine whether any potential adviser candidates possess the qualities that will be a good fit. With the firm’s own cultural due diligence completed, a profile of an ideal recruit can be developed, and the networking and recruiting process can be shaped accordingly.
  • Operational fit: RIA principals must ensure that their back-office infrastructure can support the new business brought on by an additional adviser or team of advisers. Firms must be ready to merge different systems and procedures for investing, client service, compliance, and other crucial processes.
  • Legal issues: Potential candidates may have contractual agreements with their existing employers, which may restrict the use of client information or prohibit the solicitation of clients. It is essential that both the candidate and the RIA have their own legal counsel and take advantage of the Protocol for Broker Recruiting, an agreement among the major wirehouses and any other firm that wants to join. It facilitates clients’ freedom of choice when advisers move between member firms.
  • Onboarding and transitioning: The overall timeline of a transition, from first contact to completion of transaction and transfer of clients and assets, can be six to nine months or even more. To streamline the process, RIAs can work with advisers to plan and craft communications for retaining and transferring clients and for explaining the new arrangement. Providing training and formal documentation for new advisers on firm policies and procedures around operational and compliance processes will help expedite the transition.

The report includes an RIA Readiness Checklist to help firms assess their preparedness for beginning the recruitment process, as well as a recruitment and transition timeline.

For more information about the MKT Report, advisers can contact their Schwab relationship manager or visit