According to the 13 th semi-annual Independent Advisor Outlook Study ( IAOS) released today by Charles Schwab Advisor Services, independent registered investment advisors (RIAs) appear to have reached a turning point in the industry’s progression. RIAs note a resurgence of confidence and a growing understanding of what a successful RIA business of the future must look like. While they are optimistic, advisors acknowledge emerging new challenges alongside the opportunities that lie ahead: evolving client demographics, the growing need to find and retain the best people and questions about how to differentiate their firms to stand out from competitors and capture the next generation of clients.
Bernie Clark, executive vice president and head of Schwab Advisor Services (Photo: Business Wire)
A similar sense of confidence, with an acknowledgment of reality, was echoed by investors in a companion study, also released today by Charles Schwab. According to Advice and the Affluent Investor: A Study of Attitudes and Behavior (AAIS), affluent investors mirror and in some ways amplify the upbeat outlook of advisors although they are not devoid of concerns. Get Ready: Gen X and Gen Y Will Drive Firm Profitability Five Years from Now The IAOS, which reflects the opinions of more than 1,000 RIAs representing $235B assets under management, found that advisors are well aware of the growing importance of the next generation of clients to their businesses. Sixty-five percent of advisors say women, Gen X, or Gen Y will be a driving force in their firm’s profitability five years from now. While this next generation imperative is recognized, however, advisors are more actively focused on existing clients and more immediate growth opportunities. Two-thirds (67%) of advisors identify asset growth as a top priority for their business in the next few years, with firm profitability now driven by high net worth clients (68%), boomers (62%) and retirees (61%). Only 14 percent cite finding the next generation of clients as one of their top business priorities today.