Financial Advisors Voice Interest in Independent Model, According to Charles Schwab Survey

Friday, November 20, 2009 5:30 am PST



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SAN FRANCISCO--(BUSINESS WIRE)--In a new Charles Schwab survey of advisors at major financial firms, six out of ten respondents (59%) say the idea of being an independent investment advisor appeals to them. Nearly half of all respondents go a step further to say that they would actually consider a move to independence. The surveyed advisors from wirehouses, banks and independent broker dealers are also confident about the strength of their client relationships, with eighty percent saying that they feel their clients are more loyal to them than to their firm.

“The success of independent investment advisors has not gone unnoticed by the industry at large, and there are now more individuals and teams who are investigating whether the independent model is right for them,” said Barnaby Grist, senior managing director with Schwab Advisor Services, a leading provider of custodial, operational and trading support for approximately 6,000 registered investment advisors (RIAs).

Grist also noted that not all advisors who are interested in independence want to start their own businesses from the ground up. This is echoed in the survey findings, as more than half of the advisors participating in the survey (56%) say they would rather join an existing RIA than start their own firm. “Plugging into an existing firm is an increasingly popular choice, and more RIA firms are building business models and technology platforms that allow this to take place,” said Grist. “As a result, independence has become a viable option for a greater number of advisors.”

Familiarity Matters

The survey finds that the more familiar advisors are with the concept of being independent, the more likely they are to consider such a move. In fact, of those respondents who know someone who is or has considered becoming an independent advisor, 77 percent find the idea appealing.

Nearly half (47%) of all respondents know someone who is or has considered becoming an RIA, and just under half (46%) are familiar with the process of starting or joining an RIA. Of the group that is familiar with the process, 69 percent say that they are considering becoming an RIA.

When considering the perceived challenges to going independent, advisors surveyed cite having back office support (55%), obtaining new clients (39%), and having access to research and information to support investment decisions (30%) as the top three concerns.

“There is still a great deal of education that needs to take place about the process of becoming independent and the resources that exist to help advisors run their businesses,” said Grist. “Schwab been providing services for independent advisors for more than 20 years, and there is now a thriving industry that has developed to support RIA firms in everything from business planning and compliance to technology support and investment management.”

Shifting Landscape

Advisors find themselves in a dramatically changed landscape shaped by upheavals in the financial services industry, and the survey suggests that these events have had a significant impact on advisors and their clients. Of those participating in this survey:

  • Less than half (46%) believe their employer’s brand helps them acquire or retain clients
  • Over three-quarters (76%) have had to explain why their firm is still a good place to invest
  • Half say that acquiring new clients is harder now than prior to the turmoil in the financial services industry
  • Almost 40 percent say they work for firms that have gone through a merger or acquisition.

As of the end of September 2009, 126 teams have moved to an independent model with Schwab this year. This is an increase from 123 teams in all of 2008.

To assist advisors considering independence, Schwab Advisor Services offers an array of tools and information at

About the Survey

Two hundred financial advisors participated in the survey, conducted by Koski Research from Oct. 7 to 13, 2009. Those surveyed work at more than 15 major full-service firms and 52 percent of the advisors in the survey have more than 10 years of investment advisory experience. The median assets under management of the respondents is $84 million.

Koski Research is not affiliated with Charles Schwab & Co., Inc.

About Charles Schwab

The Charles Schwab Corporation (Nasdaq:SCHW) is a leading provider of financial services, with more than 300 offices and 7.6 million client brokerage accounts, 1.5 million corporate retirement plan participants, 687,000 banking accounts, and $1.3 trillion in client assets as of Sept. 30, 2009. 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. 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 Schwab Advisor Services. The Charles Schwab Bank (member FDIC) provides banking and mortgage services and products. More information is available at (1109-11793)


Charles Schwab
Lindsay Tiles, 415-667-0479
John McInerney, 212-508-9628

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