Strategies of Top Performing Firms can help RIAs thrive

Lisa Salvi

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

Early in 2020, life as we all knew it was suddenly disrupted. Registered Investment Advisors needed to adapt quickly to a changing environment and clients' evolving needs. The enduring strength of RIA firms has reinforced a basic fact: Forward thinking can help firms thrive and grow, even in uncertain times. Whatever the future may hold, insights from Schwab's 2020 RIA Benchmarking Study—including the strategies of Top Performing Firms—can help RIAs position themselves for success.  

Growth was still top of mind: Firms ranked acquiring clients through client and professional referrals as their top strategic initiatives.

While the 2020 study was conducted from January through early April, more than three-quarters of the 1,010 participants submitted their data after March 1 of this year, when markets had already been heavily impacted by the crisis, volatility was high, and many were sheltering in place. Even as firms navigated this changing environment, growth was still top of mind: Firms ranked acquiring clients through client and professional referrals as their top strategic initiatives. 

In talking with advisors about growth, I am often asked, "What are the best-performing firms doing?" To help answer this, we introduced the Firm Performance Index. The index is based on a rigorous methodology to help RIA Benchmarking Study participants assess the strength of their overall businesses. By looking at 15 key metrics, the index identifies firms with significant growth that are operating effectively across all areas. Top Performing Firms are those that rank in the top 20% of the index. Firms of all sizes are represented in this cohort, but they operate in similar ways. The following snapshot of study findings highlights key practices that have helped Top Performing Firms succeed.

Firms benefit by planning growth strategically.
How can firms best navigate the future?

  • Maintain a written strategic plan. A long-term plan, rooted in purpose and values, helps firms respond to change and pivot when necessary. Three out of four Top Performing Firms have a written strategic plan, while 54% of all other firms have one.1 This is an area where I strongly encourage firms to dedicate time as 2020 comes to a close. Sitting down with firm leaders, realigning around a strategic plan, and identifying a set of priorities for 2021 will help firms move with intention past this year of unprecedented challenges.
  • Focus on organic growth. Organic growth2 is a key metric that all firms should track. By removing investment performance from growth numbers, firms can better understand how well their value proposition, client experience, and strategy resonate in the marketplace. Top Performing Firms brought on 29 new clients at the median, compared with 19 for all other firms. These new clients drove significant assets, as Top Performing Firms saw twice the asset growth from new clients in 2019 compared with other firms—8.3% versus 4.1%. The study found that these top performers effectively leverage client referrals, business partner relationships, and marketing to drive growth.
Asset growth from new clients by source in 2019

The client experience is key to growth.
How can firms design a client experience to attract and retain clients?

  • Identify the ideal client and what they value. Who are the people considered a "best fit" for the firm? Firms with both a documented ideal client persona (ICP) and client value proposition (CVP) attracted more new clients and new client assets in 2019.3 A larger percentage of Top Performing Firms—68%—have a written ICP, compared with 54% of all other firms. Similarly, 75% of top performers have a documented CVP, versus 59% of other firms. These tools can help inform business decisions, such as how to communicate with clients, what services to offer, and what technology to adopt. The best businesses and brands are clear on whom they are trying to serve, and the more we study what sets apart the outperformers, the more convinced I become that this is one of the biggest differentiators.  
  • Understand clients and their needs. About 70% of all firms leveraged one-on-one interviews to obtain insights about their clients, and about 60% conducted interviews with clients who make referrals. Slightly more Top Performing Firms used these methods. Feedback can improve retention: Firms that have regular client interviews saw lower client attrition of 2.9% at the median, compared with 3.6% for firms that do not conduct client interviews regularly.4 If a firm is concerned about client attrition, conducting interviews with a consistent set of thoughtful questions can illuminate opportunities and may sometimes naturally open the door to a conversation about referrals.

Operational readiness benefits the bottom line.
Are there opportunities to streamline operations? 

  • Evaluate productivity to create more time for clients. Firms have enhanced productivity, with each professional managing 53 clients in 2019 at the median versus 48 in 2015. To support this, firms have decreased time spent per client on operations annually to 17 hours in 2019, down from 19 hours in 2015. This has enabled firms to spend the same amount of time on client service.5 Top Performing Firms have demonstrated even more efficiency, also managing 53 clients per professional but spending only 13 hours per client on operations and administration annually.
Increased productivity creates more time for clients
  • Leverage digital touchpoints to engage with clients. In 2020, with many people required to be home, technology enabled firms to stay in touch with clients and continue serving them well. The study found that a majority of firms are using:
    • Electronic/digital signatures for custodian forms
    • Virtual client meetings
    • Screen sharing/co-browsing
    • Digital forms

A higher percentage of Top Performing Firms reported using all these digital touchpoints, positioning them extremely well for the virtual environment we find ourselves in today. In fact, Top Performing Firms' operational efficiency may result at least in part from their embrace of technology. Use of such tools will continue even as concerns about in-person interactions recede, because digital channels tend to be more cost-effective and secure and can provide a better client experience.

Times of uncertainty can elevate an RIA's role in a client's life, as concerned investors reach out for guidance and support. The current environment is an opportunity for advisors to demonstrate the value they can offer clients beyond their expertise. With best practices in place, designing the client experience thoughtfully and intentionally can help drive success while ensuring that firms exceed clients' expectations. 

What the RIA Benchmarking Study can do for you
Participating in Schwab's annual RIA Benchmarking Study can give you the insights you need to chart a course for your firm. Each participating firm receives a customized Benchmarking Peer Report. And those firms that participate in the compensation portion of the study also receive an in-depth Benchmarking Compensation Report along with access to Schwab's online compensation tool. These personalized reports provide side-by-side comparisons of your firm's data against that of other similar firms. This information can help you define where you are, where you're headed, and what getting there looks like. 

The RIA Benchmarking Study is part of Schwab Business Consulting and Education, which provides a wide range of programs to help you grow and manage your business. The 2021 study will open in January. Contact your Schwab Advisor Services™ representative to take advantage of these resources, or visit our benchmarking resource page to learn more about the study and hear advisors share why they participate. 

"Insights from Schwab's Benchmarking Study are incredibly valuable in helping us see whether our firm is positioned competitively. We use those insights to pressure-test our strategy."

—Catharine Aguilar, Chief Marketing Officer, CornerCap Wealth Advisors

What you can do next

RIA Benchmarking Study resource page – 1,010 advisors participated this year, representing just over $1 trillion in AUM. Learn more about the study and the benefits of participating.

2020 Compensation Whitepaper – Review the latest data on what RIA staff are getting paid across 27 key roles at a national level.

Insights on how advisors drive long-term growth – Visit this interactive webpage highlighting 2020 study findings that reaffirm essential pathways to success.


1. Top Performing Firms are those that rank in the top 20% of the Firm Performance Index. The index evaluates all firms in the Benchmarking Study according to 15 metrics to arrive at a holistic assessment of each firm's performance across key business areas. Results are from the 2020 RIA Benchmarking Study from Charles Schwab, fielded January through early April 2020. Study contains self-reported data from 1,010 firms.
2. Organic growth is the change in a firm's assets from new, existing, and lost clients before investment performance is taken into account, and it excludes the growth from acquisitions or divestitures and from advisors joining or leaving.
3. Median results for all firms with $250 million or more in AUM.
4. Firms over $250M in AUM that do not conduct client interviews on a regular basis include firms that never conduct interviews or conduct them only on an ad hoc basis.
5. Median results from the 2016 and 2020 RIA Benchmarking Study from Charles Schwab. Results for all firms with $250 million or more in AUM. 

About the 2020 RIA Benchmarking Study from Charles Schwab

Schwab designed this study to capture insights in the RIA industry based on self-reported data from individual firms. The 2020 study, fielded January to early April, provides median results for all firms with $250 million or more in assets under management and provides information on topics such as asset and revenue growth, sources of new clients, products and pricing, staffing, compensation, client experience, technology, and financial performance. A total of 1,010 advisory firms that custody their assets with Schwab Advisor Services and that represent $1.1 trillion in AUM participated this year, making this the leading study in the RIA industry. 

The RIA Benchmarking Study comprises self-reported data from advisory firms that custody their assets with Schwab. Schwab did not independently verify the self-reported information. Participant firms represent various sizes and business models. 

The Firm Performance Index evaluates firms in the study according to 15 metrics that align with the Guiding Principles for Advisory Firm Success, to arrive at a holistic assessment of each firm's performance across key business areas. The Firm Performance Index is calculated among all firms in the study without regard to assets under management or firm type. Firms that rank in the top 20% of the index are included in the Top Performing Firms.

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The above-mentioned firms and their employees are not affiliated with or employees of Schwab unless otherwise noted. They 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. 

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Information included on this site is intended to be an overview and is subject to change. Experiences expressed by advisors may not be representative of the experience of other advisors and are not a guarantee of future success.

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