All signs point to RIA

Submitted by Marc.Jones on April 30, 2020

Slide 1:

All signs point to the RIA 
5 reasons top-performing teams are breaking away 

The Registered Investment Advisor (RIA) movement has reshaped the advisor landscape. Offering new opportunities, resources, and support, the independent RIA model can serve the evolving needs of advisors and their clients. In response, advisor teams are moving to independence at an inspiring rate.

Slide 2: 
 
1 Teams of all sizes are leaving the building

Old argument: The RIA space is only for smaller shops. 

"Multibillion-dollar teams don't view this as running away," says John Furey, founder of Advisor Growth Strategies. "They view it as the best structural and long-term decision for the team and their clients."

106% industry-wide increase in RIAs that had $1B+ in client assets between 2012 and 20171

1. The Cerulli Report: U.S. RIA Marketplace 2018, Exhibit 2.14.

Slide 2: 
 
2 The support ecosystem is robust

The industry today has a mature ecosystem of support that has attracted a record number of sophisticated teams, leading to historic growth in the RIA channel. Industry services include compliance, technology, transition support, ongoing practice management, and marketing.

Growth breeds maturity: Far outperforming other models, RIA assets have grown 
16.6% annually since 20072

2. The Cerulli Report: U.S. Intermediary Distribution 2018, Exhibit 2.07.

Slide 3: 
 
3 Keep more of what you earn

Old way: Working 110% to earn 40%

Some teams are seeing revenue gains, even in the short term. With more control over their money, they can reinvest, develop a brand, and realize the value of ownership.

Median 5-year annual growth rates in revenue for newly transitioned teams.3

500M to 1B AUM 
21.7%

$1B+ AUM
19.7%

3. 2018 RIA Benchmarking Study from Charles Schwab, fielded January to March 2018. Study contains self-reported data from 1,261 firms. Participant firms represent various sizes and business models categorized into 12 peer groups—7 wealth manager groups and 5 money manager groups—by AUM size.

4 Freedom to put clients first 

"We still have so much room to grow. Why? Because most investors do not understand something as simple as fiduciary versus suitability standards."
Tim Oden, Senior Managing Director,
New Business Development,
Charles Schwab

Old way: Pay hurdles and product constraints 

RIA teams have the ability to meet the complex needs of sophisticated investors. Without the constraint of broad-stroke policies, they are free to create a more advisor-friendly,consumer-friendly approach.

41% of advisors are expanding services beyond investment advice or wealth management4

4. Charles Schwab Independent Advisor Outlook Study, June 2017.

5 On track to meet shifting expectations 

Old fear: Clients won't follow you if you leave.

Financial advisors are being shaped by shifting expectations. A client-first approach is becoming the norm, and RIAs are well positioned as they strive to be trusted fiduciaries.

Advisors retain an average of 87% of clients when they go independent5

5. Independent Advisor Sophomore Study from Schwab Advisor Services, Logica Research (formerly Koski Research), March 2018.

Slide 6: 
The rise of the RIA and you 

Want to learn more about how elite team are redefining the RIA landscape?

Visit advisorservices.schwab.com/[insert vanity URL of new offer page]

Slide 7: 

The above mentioned firms and their employees are not affiliated with or employees of Schwab unless otherwise noted. Mention should not be construed as a recommendation, endorsement of, or sponsorship by Schwab. The views expressed are those of the third party and are provided for informational purposes only. Experiences expressed are no guarantee of future performance or success and may not be representative of you or your experience.

For informational purposes only.

Third-party firms and their employees are not affiliated with or an employee of Schwab.

Registered Investment Advisors™ are independent and are not employees or agents of Charles Schwab & Co., Inc. and its affiliates.

Schwab Advisor Services does not provide legal, regulatory, or compliance advice to independent RIA firms.

Schwab Advisor Services serves independent investment advisors and
includes the custody, trading, and support services of Schwab. Independent investment advisors are not owned by, affiliated with, or supervised by Schwab.

© 2020 Charles Schwab & Co., Inc. ("Schwab"). All rights reserved. Member SIPC. 
 

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