Schwab Finds Half of Advisers Would Consider Independence

When Charles Schwab asked advisers outside the registered investment adviser (RIA) channel whether they’d consider going independent, almost half said yes.

While only 11% said they are “extremely likely” to consider going to an RIA, 38% said they are somewhat likely, according to the survey commissioned by Charles Schwab. Another 43% are not likely, and 8% are not sure.

Whether they would consider the move, the majority of advisers find going to an RIA “somewhat” or “very” appealing (40% and 19%, respectively). If they went to an RIA, most (56%) surveyed advisers would prefer to join an existing firm, while 27% would prefer to start their own, and 17% don’t know.

Almost half (47%) of the advisers reported having friends or colleagues who have considered becoming an independent RIA. Interestingly, those advisers are more likely to consider becoming an RIA themselves. Almost one in five (19%) of advisers that know someone report being extremely likely to join an RIA, compared to 4% who don’t know someone.

Advisers who are familiar with the process of joining or starting an RIA are also more likely to consider becoming an RIA (69%) than those who are unfamiliar with the process (30%). Overall, 46% of surveyed advisers are familiar with joining or starting an RIA.

Why would advisers want to join an RIA? Most said independence and greater payouts. Specifically, surveyed advisers cited independence (51%), opportunity for a larger income (47%), and opportunity for long-term financial success (44%) as the top reasons to join an RIA.

The greatest perceived challenge of joining an RIA is back-office support (55%), followed by obtaining clients (39%), according to the survey. The majority (80%) of advisers said clients would follow them to an RIA. In fact, less than half (46%) of advisers said their firm’s brand helps them acquire and retain clients.

The overwhelming majority (80%) of surveyed advisers said that since the financial upheaval, they have reassured clients about the financial stability of their firm. More than three-fourths (77%) said they have demonstrated to their clients that their firm has clients’ best interests in mind. More than one-third of advisers said that since the financial upheaval they have helped clients understand the impact of their firm’s merger or acquisition.

Half of the surveyed advisers said client acquisition is harder since the financial crisis (31% said it is “about the same” and 20% reported it is easier).