Charles Schwab Finds Independent Financial Advisors Focusing on Existing Client Relationships in Current Environment

Majority of Advisors Surveyed Say Proactive Client Communication is Key

Thursday, February 5, 2009 6:00 am PST



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SAN FRANCISCO--(BUSINESS WIRE)--Independent investment advisors overwhelmingly say that managing existing client relationships is their top business priority in the current economic environment, according to a recent survey by Charles Schwab, a provider of custodial, operational and trading support for more than 5,500 independent investment advisory firms. When asked to prioritize key areas of business management, 71 percent of advisors surveyed ranked focusing on existing client relationships as job one and 96 percent said it is one of their top two priorities at this time.

The advisors surveyed, who will also be the focus of a soon-to-be released Schwab Market Knowledge Tools® (MKT) “Best-Managed Firms” white paper that identifies best practices among some of the industry’s most successful and fastest growing firms, were asked to prioritize five areas of running an advisory firm including relationship management, investment management, marketing and business development, strategy and planning, and operations and support. These five categories are also the focus of the upcoming white paper.

“Almost every advisor we talk to is focused on helping their existing clients through this difficult time, and rightfully so,” said Trish Cox, chief operating officer of Schwab’s group that serves independent investment advisors. “The common thread we see with most firms is a strong emphasis on reaching out to clients proactively through one-on-one conversations and broader communications that educate and ease their concerns.”

Proactive Client Communication Seen as Essential

When it comes to managing existing client relationships, proactive communication is clearly a priority for the advisors surveyed. Ninety-seven percent of advisors surveyed indicated that one-on-one communication with clients is important, and 50 percent said that it has increased in importance in the last 12 months. Ninety-six percent of advisors said that proactive communication with clients via emails, letters and telephone calls is important, and 83 percent said that proactive outreach increased in importance in the last 12 months.

When asked about the kinds of topics they are discussing with clients, 93 percent of advisors said that the firm’s investment approach is important to communicate. And proactive communication should not end with clients, they said. Eighty-seven percent said that communicating within the firm about investment decisions is important.

When those surveyed were asked to prioritize business activities, six of the top 10 priorities were related to client communications and two were focused on staff communications:

Top 10 “Very or Extremely Important” Activities



One-on-one communications initiated by your firm (97%)

50% say this is more important now than 12 months ago



Communicating proactively with clients via email, letter, calls (96%)

83% say this is more important now than 12 months ago



One-on-one communications initiated by your client (94%)

53% say this is more important now than 12 months ago



Investing time in retaining clients (93%)

80% say this is more important now than 12 months ago



Client communications on investment approach (93%)

63% say this is more important now than 12 months ago



Communicating within firm on investment decisions (87%)

50% say this is more important now than 12 months ago



Principal (vs. staff) time returning calls (83%)

60% say this is more important now than 12 months ago



Aligning current objectives between leadership & staff (77%)

57% say this is more important now than 12 months ago



Investing time in marketing/business development for new clients (70%)

43% say this is more important now than 12 months ago



Streamlining operations process (70%)

47% say this is more important now than 12 months ago

Many Advisors Still Focused on Technology

Technology continues to be a focus for many advisors as well. Of the advisors surveyed, 60 percent said implementing technology to help with client communications is important, 56 percent placed importance on investing in technology to reduce client support operations time, and 46 percent indicated that investing in technology to support investment management is an important focus.

But advisors have not lost sight of the importance of business strategy and planning. Sixty-seven percent said that medium- to long-term business planning for the next three to five-plus years is an important priority.

About the Survey

In November and December 2008, Charles Schwab talked to 30 independent registered investment advisors (RIAs) about their business management priorities and how they might have changed due to market and economic events. Firms surveyed range in size from $186 million to $5 billion in assets under management and are in the top 20 percent of qualifying RIA firms in Charles Schwab’s 2007 RIA Benchmarking Study in terms of productivity, profitability and revenue growth. Schwab’s 2009 RIA Benchmarking Study is currently being fielded to advisors and the results are expected to be ready in June.

About Charles Schwab

The Charles Schwab Corporation (Nasdaq:SCHW) is a leading provider of financial services, with more than 300 offices and 7.4 million client brokerage accounts, 1.4 million corporate retirement plan participants, 447,000 banking accounts, and $1.1 trillion in client assets. Through its operating subsidiaries, the company provides a full range of securities brokerage, banking, money management and financial advisory services to individual investors and independent investment advisors. Its broker-dealer subsidiary, Charles Schwab & Co., Inc. (member SIPC,, and affiliates offer a complete range of investment services and products including an extensive selection of mutual funds; financial planning and investment advice; retirement plan and equity compensation plan services; referrals to independent fee-based investment advisors; and custodial, operational and trading support for independent, fee-based investment advisors through its Advisor Services division. The Charles Schwab Bank (member FDIC) provides banking and mortgage services and products. More information is available at (0209-7873)


Charles Schwab
Michael S. Cianfrocca, 415-667-3252

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Trish Cox, chief operating officer, Schwab Institutional (Photo: Business Wire)

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