5 strategic questions to ask about your business

Lisa Salvi, Vice President, Advisor Services Business Consulting and Education

Many firms struggle with the complexities of a growing business and knowing what to do next. Yet long-term success depends on leading a business with purpose. Schwab's RIA Benchmarking Study can help you clarify your goals and chart your course.

Key Points

  • Looking to grow your firm? Consider these five key strategic questions. Lisa Salvi explains how the RIA Benchmarking Study can help you get the answers you need to move forward.

Over the years, thousands of firms have taken advantage of the RIA Benchmarking Study to assess their business performance in areas such as revenue, staffing, technology, and clients. Thanks to this broad participation, the study results help provide a clear look at your firm's place in the industry today and a starting place for future strategy. Many advisors have found that making time to participate in the study helps them focus on their practice and sort out competing priorities.

Prompting changes and improvements

As the largest study of its kind in the industry, Schwab's Benchmarking Study yields data that is robust and comprehensive. If you participate—the study is currently open to firms of all sizes—you'll receive customized information about your firm, side-by-side with data about your competitors. The wide variety of information generated through the study has led to significant changes and improvements for many firms.

"The Benchmarking Study gives us greater clarity on where we need to focus attention, and that helps drive our initiatives."

--Independent advisor

When I talk with advisors about their growth goals, certain questions invariably come up. In this article, we look at five of those key questions the Benchmarking Study can help you answer.

How does my growth compare with that of my peers?

Growing your firm requires focus, strategic planning, and an innovative mindset. Looking at long-term trends can help you evaluate where you might want to direct your efforts to reach your vision. To illustrate these trends, the Benchmarking Study provides the five-year compound annual growth rates (CAGR) for assets under management (AUM), clients, and revenue. For example, results from Schwab's 2019 RIA Benchmarking Study show five-year AUM CAGRs range from 6.5% to 8.4% at the median based on the peer group, highlighting a positive trajectory for advisors of all sizes.1

Am I offering the right services to attract and retain clients?

In deciding how to structure their offerings, successful firms tend to define and focus on their ideal client, then provide an experience those clients will value. Benchmarking Study results show that firms are expanding their service offerings to help enrich and strengthen client relationships. As we learned in the 2019 study, many firms have offered charitable planning as well as tax planning and strategy for some time. The study also shows that in the last five years the number of firms offering family education rose to 72% from 58%.

Do I have the processes in place to increase productivity while maintaining the right client touch?

Institutionalizing your business through technology and centralized processes can help scale operations and maximize time with clients. Study results in 2019 showed that a greater number of firms, 37%, have standardized half or more of their workflows within their CRM, compared with 31% five years earlier. During this period, professionals increased the number of clients they serve without reducing the time they spend with each client.

Am I leveraging referrals and marketing to maximize organic growth?

Growth-oriented firms recognize the need to invest resources to amplify their value and attract new clients. They understand the importance of delivering a consistent message in everything from the firm's digital presence and financial reports to conversations with staff, clients, and business partners. The fastest-growing firms2 in the 2019 study generated significantly more growth from new client assets than other firms by leveraging many channels, including business partner referrals and marketing as well as client referrals.

Does my compensation strategy help me attract and retain the best talent?

When you invest time in hiring and developing key talent whom your clients have come to trust, it's critical for the firm's continuity to keep them. Equity ownership is becoming an important part of many firms' compensation packages. As shown in the 2019 study, firms are offering equity ownership primarily to retain staff and to support a succession strategy. The percentage of firms offering equity to non-founders ranges from 42% to 83% based on peer group.

An essential management tool

Informed answers to these strategic questions can help you drive your business forward. Participating in the annual RIA Benchmarking Study is a way to get reliable answers, in turn sparking insights and spurring action.

"I would describe the Benchmarking Study as an essential tool for anyone who cares about running their business well."
--Independent advisor

The RIA Benchmarking Study is available to all firms that custody assets with Schwab, and firms of all sizes can benefit. In 2019, 1,310 firms representing $1.1 trillion in AUM participated in the study. I urge you to participate and take advantage of this unique opportunity to gain insights about your own business as well as the industry.

If you have already started the study, remember to submit it by March 18 (5 p.m. PT, 8 p.m. ET). If you haven't begun, you still have time to complete the study now or learn more about how to get started and what you'll receive by watching this short video. And please be assured that your data is held in the strictest confidence.

Once you have experienced the benefits of participating, I am confident you will agree with the advisor who told us, "I would describe the Benchmarking Study as an essential tool for anyone who cares about running their business well."

The RIA Benchmarking Study is part of Schwab Business Consulting & Education, which provides a wide range of programs to help you grow and manage your business. To learn more about the RIA Benchmarking Study, visit our benchmarking resource page, or contact your Schwab Advisor Services® representative.

Participate in the 2020 RIA Benchmarking Study

Visit our benchmarking resource page to learn more about the study

Explore more insights from the 2019 RIA Benchmarking Study to see details supporting these 5 strategic questions