More than half of surveyed investment advisors find the idea of becoming an RIA appealing; Even stronger interest from those under age 40
The top three benefits cited by advisors who find the idea of becoming an RIA appealing include the potential for larger income (56%); the freedom that comes with running their own business (52%); and the ability to place a higher priority on client service and communications (51%).
Demonstrating a strong client-centric orientation, 89 percent of those surveyed say that they are more committed to serving their clients than serving their firms. While most advisors view the ability to place a higher priority on client needs and to offer a broader set of investment products and services as potential benefits in joining or starting an independent RIA firm, advisors under 40 are even more likely to see these as benefits. Perhaps indicating the effect of more years in the business of serving clients, advisors over 40 were more likely than their under 40 peers to feel that clients are more loyal to their advisor than they are to an advisor’s firm, and they were also more likely to think that their clients would follow them if they left to start their own firm.
“The survey results reinforce the client-service orientation of advisors considering independence and the responsibility they feel to meeting their clients’ needs,” said
Current market and firm conditions
Given the recent market climate, many advisors surveyed say that they are fighting an uphill battle to meet client goals, with 87 percent of those surveyed saying it’s more difficult to meet clients’ financial goals today, compared to the past five years. And they don’t expect it to get easier: 53 percent of those surveyed said meeting clients’ financial goals would be more difficult in 2012 than in 2011.
Advisors under 40 feel even more strongly than those over 40 that increased challenges in helping their clients be financially successful include pressures from their current firm’s management to grow book of business, losing assets to other firms and advisors, and too much focus on presenting proprietary-specific products at their current firm. Nearly four-fifths (79%) of those who find the idea of becoming an RIA appealing said that they are explaining more to their clients about the publicity connected with
“The results confirm that advisors seek an environment they feel will give them the freedom to make choices that will most benefit their clients and their businesses,” Oden added. “The growth of the independent model in recent years is attracting more individuals and teams who are exploring if independence could be right for them, whether that means joining an existing firm or starting their own.”
For complete survey results, visit www.aboutschwab.com/press/research.
Resources and insights for advisors considering a transition to the RIA model
Schwab Advisor Services has launched dedicated website content (schwabadvisorcenter.com/futureyouwant) that provides advisors considering the transition to independence detailed information about becoming an RIA. The website features video testimonials and case studies that give viewers first-hand accounts of advisors’ experiences in moving to the RIA model, as well as insight into how they made the transition. Schwab will also host the Build the Future You Want webcast on
In addition, the latest
About the Survey
Over 200 financial advisors participated in the survey, conducted by
Experiences shared are not a guarantee of future success and may not be representative of your experience.
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jennifer.davis@schwab.com
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