4 RIA talent retention strategies

The competition for RIA talent is not likely to ease anytime soon. Schwab's 2024 Benchmarking Study estimates that the industry will need to hire 70,000 new staff over the next five years¹, making it as important as ever to retain essential employees.

So, what does it take to keep talent? Many firms start by creating a talent strategy that includes an employee value proposition (EVP). An EVP explains what a firm offers its employees in return for the skills, knowledge, and experiences they bring to the firm. An EVP is more than a salary range and a list of benefits. It articulates values, opportunities for professional development, clear career paths, and a firm's culture. Here's four areas of an EVP that you can start with:

1. Help employees upskill and connect with mentors

Helping employees continue their personal and professional growth can create a strong bond with your firm. This may be one reason why developing capabilities and skillsets of staff was a top-five strategic priority in Schwab's 2024 RIA Benchmarking Study.

Many firms now pay for specialized training, continuing education, or industry certifications. They're also adding in-house professional development strategies, such as one-on-one mentorship programs that match junior employees with senior members of the team and one-on-one advocacy programs that pair coworkers to monitor each other's developing skills and then speak on their behalf for potential career opportunities.

2. Map out clear career paths

Employees who know they're on track for future advancement are more likely to stay with your firm. You can provide this visibility by establishing career paths that include clearly defined job descriptions and expectations, as well as the training and skills needed to achieve those positions. 

For example, RIA firms can break down client service roles into clear tiers, such as client service associate, client relationship manager, and senior client relationship manager. Other career paths might focus on achieving management positions, such as CIO, CFO, and COO. Based on these paths, mentors or managers can work one-on-one with employees to map out their career goals and trajectory, then conduct regular check-ins to measure progress.

3. Incentivize loyalty with your pay structure 

It goes without saying that higher pay helps retain workers. But adding incentive-based pay and bonuses on top of base salary can help make firm wins feel like personal wins. In fact, according to Schwab's 2024 RIA Compensation Insights Study, firms using performance-based incentive pay saw 51% higher compound annual growth rate (CAGR) revenue over five years and 43% higher CAGR client growth². 

Other non-salary incentives such as annual leave, flexible work arrangements, time to volunteer, and wellness initiatives can also help staff feel valued.

4. Develop an inclusive culture

When people feel that a firm has made a place for them, they're more likely to internalize the firm's mission and work to reach their full potential. Inclusion starts with opening your door to feedback and ideas. For example, leaders should include junior employees on key teams or special initiatives that are likely to shape the future of the firm. Taking inclusion a step further might involve creating affinity groups and professional networks that allow women and minority employees, for example, to build relationships and find mutual support.

Inclusion starts at the top, with company leaders getting on board, staying engaged, and welcoming accountability. Measuring managers' performance on metrics such as turnover, promotion rates, and employee satisfaction can provide important data that informs your inclusion efforts. 

Successful firms retain talent

There's a connection between an RIA firm's overall performance and its ability to retain employees. Our 2024 RIA Benchmarking Study found that firms with AUM of more than $250 million had a median staff attrition rate of 6.9%. Yet, top-performing firms only experienced a 1.6% attrition rate. 

Keeping your staff on board and engaged requires investments in training and development, the implementation of a strategic compensation model, and a commitment to fostering an inclusive work environment. Like any investment, a long-term commitment to retention that's backed by an insightful talent strategy, can reward your firm with solid returns now and for years to come.

What you can do next

• Explore tools in our Talent Resource Center to help you empower high performance at your firm. And if you custody with Schwab, log in to learn how a compelling employee value proposition can help your firm differentiate itself in the marketplace and retain the talent you want to keep.
• Consider a custodian that is invested in your success. Contact us to learn more about the potential benefits of a Schwab custodial relationship.