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TheStreet Open House

Bernie Clark, Executive Vice President And Head Of Schwab Advisor Services (Photo: Business Wire)

Charles Schwab Advisor Services released results of its 15 th semi-annual Independent Advisor Outlook Study ( IAOS) today at its annual EXPLORE ® conference. Bernie Clark, executive vice president and head of Schwab Advisor Services, cited IAOS findings as he spoke with an audience of more than 160 independent registered investment advisors (RIAs) about the significant opportunity for growth over the next decade, as the next generation of clients – which Schwab calls ‘ Generation Now’ – begins to actively seek financial advice and guidance to help them meet their financial goals. Currently, those between the ages of 30-45 control nearly $3.5T in investable assets. 1

Bernie Clark, executive vice president and head of Schwab Advisor Services (Photo: Business Wire)

Bernie Clark, executive vice president and head of Schwab Advisor Services (Photo: Business Wire)

“Nearly 40 percent of RIA clients are retired, 30 percent are less than ten years from retirement and 63 percent of those retired are withdrawing from portfolios, including from principal, according to our survey findings,” said Clark. “With this in mind, now is the time for independent advisors to actively focus on acquiring the next generation of clients and assets – especially given that the majority of advisors tell us they are planning for legacy.”

The new IAOS results reflect the opinions of 720 independent advisors representing an estimated $180 billion in assets under management. This wave of the study set out to better understand independent advisors’ perspectives on the opportunities they see with the next generation of clients, and to understand how they are planning to augment their strategies for business growth in order to take advantage of the potential opportunities.

The Next Generation of Assets: Business Challenge, Opportunity or Risk?

Given the aging of RIAs’ current client base, advisors are increasingly focused on sourcing the next generation of clients.

  • With $16T in total wealth transfer anticipated by 2050 2, advisors are divided on whether the next generation investor presents a risk, an opportunity or simply a challenge. When asked about the movement of money to the next generation and the fact that assets could be spread out across more people or children:
    • Thirty-seven percent of advisors see risk and believe they will need to develop new client relationships that will enable them to grow their business and maintain asset levels.
    • Forty percent see an opportunity to develop a model to meet the needs of emerging clients and smaller accounts.

“We feel that the next generation investor is unequivocally an opportunity for independent advisors,” said Clark. “They have significant wealth, and their individualized priorities along with the competing financial needs in their lives can benefit greatly from the customized, client-focused advice that independent advisors can deliver.”

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