Firmly Focused on the Future of the RIA Industry, Schwab’s Bernie Clark Calls on RIAs to Stand Out, Differentiate and Earn the Trust of Generation Now Investors Today

Cautions against complacency and encourages RIAs to address implications of generational change across firms and clients from their position of strength

Wednesday, November 5, 2014 7:30 am PST



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"Now is the time for independent advisors to actively focus on acquiring the next generation of clients, especially given that the majority of advisors tell us they are planning for legacy1"

DENVER--(BUSINESS WIRE)--Addressing a crowd of more than 3,600 attendees at IMPACT® 2014, the nation’s largest and longest-running annual gathering of independent registered investment advisors (RIAs), Bernie Clark, executive vice president of Charles Schwab & Co. Inc. and head of Schwab Advisor Services, challenged RIAs to pay attention to generational changes impacting the industry at both the firm and client level, as well as the environment of disruption happening on an even larger scale in well-established industries – from transportation and payment systems to healthcare and vacation lodging.

“Now is the time for independent advisors to actively focus on acquiring the next generation of clients, especially given that the majority of advisors tell us they are planning for legacy1,said Clark. “In order to be the model of the future – to serve generations of investors to come – advisors must constantly anticipate and evolve in order to remain relevant, particularly as we see where consumer and investor trends are heading. Whether it is creating a robust online presence for your firm, or harnessing mobile and cloud technology that will allow you to adapt and deliver service the way these clients expect it, now is exactly the right time to focus on the future – from a position of strength.”

Planning for the next generation of assets is important because much of the RIA industry’s current success is built on an aging population, which is now moving into retirement and de-accumulation. According to Schwab’s Independent Advisor Outlook Study (IAOS)2, nearly 70 percent of RIA clients are retired or expected to retire within the next 10 years and, among this group, 63 percent are drawing down their portfolios, including principal. At the same time, there is $16 trillion3 in wealth transfer expected by 2050, and by Schwab’s estimates more than $3.5 trillion is already in the hands of what Schwab calls Generation Now.

Positioning RIA firms for success with Generation Now

Showcasing results from the Charles Schwab Generation Now Study for RIAs published earlier this year, Clark shared Schwab’s insights into the Generation Now investor – affluent individuals between the ages of 30 and 45 who are following on the heels of advisors’ current pre-retired or retired clients. Schwab’s research shows they are a great fit for advisors under the RIA model.

“We have focused this year on busting through misconceptions and myths surrounding this next generation of investors. It has become clear that RIAs have a strong value proposition when it comes to Generation Now, and we are aligning our efforts to leverage our expertise and resources toward empowering RIAs to win and serve these emerging clients,” said Clark. “We feel advisors also need to take active steps at the individual firm level to be out in front of this opportunity, ensuring that they are putting themselves in Generation Now’s sights and meeting them where they are.”

Underscoring the significant opportunities ahead for firm growth, Clark called on RIAs to empower themselves and their firms to meet this opportunity by “understanding and gaining the trust” of Generation Now clients and raising awareness of the client-first benefits of the independent RIA model, which is largely unknown to this cohort.

Clark outlined four key ways for RIAs to position their firms for success with Generation Now:

  • Make yourself known
  • Demonstrate how you are different
  • Become indispensable
  • Ignite changes happening within your own firms

Make yourself known

Clark encouraged advisors to start by developing a clear firm value proposition and then communicating that value proposition across your network. Among the steps RIAs can take:

  • Create a referral culture: Develop a strategy to institutionalize the referral process through existing clients and centers of influence. To support firms on this front, Schwab announced a new Insight to Action Program, “Creating a Referral Culture,” which aims to help everyone in a firm recognize, create and capitalize on referable moments, in addition to helping advisors clearly articulate their value proposition. The new program will be available later this year.

“Everyone in your firm needs to be able to clearly articulate your firm’s value and the things that differentiate you,” said Clark.

  • Maximize your online footprint: When it comes to finding an advisor, “our research shows that Generation Now does their homework and they do much of it online,” said Clark. Advisors need to make sure their value proposition is clearly articulated on their website and across their active social media channels so that the firm will show up in online research and give advisors a better chance to connect with these prospects.
  • Tap current client base: Clients’ adult children are the potential beneficiaries of the expected $16 trillion wealth transfer projected by 2050, and yet according to IAOS only 16 percent of advisors are routinely in contact with the children of clients.

“There is no better way to deepen relationships than by helping the families of current clients,” said Clark.

  • Use RIA Stands for You: Launched by Schwab in 2011, the site contains a wealth of educational resources and marketing templates to help RIAs explain the value of the RIA model to investors.

Firms can also register for the free RIA Stands for You advisor directory to make it easier for prospects to find them. This is an important step given that, according to Schwab’s Generation Now research, these individuals believe good advisors exist, but they don’t always know where to find them. Since the directory launched last year, there have been more than 10,000 searches that have resulted in some kind of follow up with an RIA.

Demonstrate how you are different

The Generation Now research found these individuals are wary of the financial industry and advisors and therefore RIAs must build trust via collaborative relationships, listening and transparency. Clark suggested several ways for RIAs to do this, including:

  • Demonstrate shared values: Generation Now investors are looking for an advisor who can build a trusted relationship based on empathy and understanding of the whole person, not just their financial goals, according to Schwab’s study.

In order to support advisors on this front, Schwab has launched the Schwab Insights HubTM, a new centralized resource for RIAs bringing together key intelligence, strategic insights and points of view to support advisors in their businesses. Of note, the hub includes a range of resources to help advisors know and understand Generation Now clients based on the extensive qualitative research Schwab undertook earlier this year.

“As the largest and longest-serving custodian of RIAs, Schwab has a unique collective view of RIA firms and in-depth and valuable insights on the needs of their current and future clients,” said Clark. “We have a deep well of existing information and will continue to commission proprietary research and viewpoints that will make this one-stop destination a valuable resource for RIAs to leverage the knowledge, expertise and perspectives they need for ongoing success.”

  • Identify, acquire and develop the right talent: “The RIA model is defined by the individuals on the front lines of client service and the future of the industry relies heavily on the incoming class of young advisors to this space,” says Clark. RIA firms can set themselves apart by finding and developing talent that is able to connect with and understand Generation Now clients.

In support of this need, Schwab Advisor Services has launched a comprehensive plan to help advisors understand the opportunity for and value of creating a diverse workforce. Called RIA Talent AdvantageTM, the program is designed to help firms attract, promote and retain diverse talent and thrive in a highly competitive marketplace.

The program will focus on three important aspects of advisor talent: individuals to serve Generation Now, ethnic diversity and women. More information on the program is available here.

Schwab is also expanding its support of universities in an ongoing effort to help cultivate the advisors of the future. In addition to its existing relationship with Texas Tech and University of California, Irvine, Schwab is embarking on a $200,000 commitment to Virginia Tech, which will include:

  • Establishing the Charles Schwab Financial Planning Suite through renovation of existing space used by the school’s Financial Planning Program;
  • Underwriting new course offerings and the potential expansion of existing courses related to financial planning, along with increased opportunities for hands-on learning and community outreach for students in the financial planning program;
  • Providing support for the school’s proposed Business Learning Community, a state-of-the-art home for the Pamplin College of Business, which will provide an enriched learning environment for tomorrow’s financial planners.

Schwab has also signed a three-year pledge of $100,000 to the University of Akron. The funds will be used to accelerate enrollment in its CFP program by hiring a director to recruit students and build awareness of a career in financial planning.

“It is critical to raise awareness for the independent model as a differentiated and compelling career choice for young people from all backgrounds who are looking to enter the financial advisory space, and our support of educational institutions around the country enables us to play a role in this,” said Clark.

Become indispensable

Individuals have come to expect a certain level of service, accessibility and responsiveness in their day-to-day lives, and Generation Now investors are no exception. Schwab’s Generation Now research found that these individuals are seeking transparent relationships with their advisors and they expect to be heavily involved in decisions about their investment strategy.

“Technology can be used to fundamentally underscore the value of an RIA by enabling advisors to access and share information, customize insights and connect with clients in real-time and on-demand,” said Clark. “It also provides an important new level of transparency for investors. New solutions such as e-authorizations and portal-based performance reporting give investors a direct line of sight into their finances, including how their advisor is implementing advice and overall progress against long term goals.”

Among Clark’s calls to action for RIAs:

  • Adapt service models to reflect the reality of how people seek and exchange information today – on their terms: “Generation Now investors demand a different approach to technology, expecting it to be infused into the work they do with their independent advisors,” says Clark.

According to the most recent IAOS released today, three quarters of advisors use mobile apps in their daily lives outside the office and yet fewer than half are using this technology in their firms. That said, the gap appears set to close, with an additional 34 percent planning to leverage mobile apps in their business within the next two years. Clark directed advisors to Schwab’s white label app – Schwab Advisor Mobile Connect – which enables advisors to customize and brand their mobile presence and keep pace with how today’s clients are interacting with information and services.

Schwab also announced that Schwab Advisor Portfolio Connect (formerly Project PM2), its new portfolio management solution, is in beta testing and is being previewed at IMPACT this year. First mentioned at IMPACT 2013, the new solution will offer a rich, dynamic view of client portfolios so advisors can easily explore and share information with clients, while also providing clients with more visibility into their finances.

  • Creating a pipeline for the next generation of emerging affluent clients via automated advice: Clark also addressed a recent announcement from The Charles Schwab Corporation regarding the planned launch of Schwab Intelligent Portfolios™the company’s new automated investment advisory service that will offer advisors on Schwab’s platform the option to integrate a new tool into their practices designed to offer scale and efficiency for investors with less complex investing needs.

Commenting on the new offer, Clark said, “Schwab Intelligent Portfolios™ may be a good solution for advisors wishing to serve their existing clients’ children or those with fewer assets who are in asset accumulation mode. It can also help create a pipeline for the next generation of emerging affluent clients who may not yet have sufficient assets for more traditional approaches, but who will grow over time.”

Schwab Intelligent Portfolios™ will be available to RIAs in 2015.

Ignite changes happening within your own firms

Lastly, Clark called on founding and next generation advisors to come together to pursue the future together. Noting that generational change is happening inside RIA firms just as it is in the investing public, Clark said, “Your clients are de-accumulating, younger investors are knocking at your doors, and members of the next generation are moving into leadership positions in your firms. Take advantage of that dynamic.”

“All of you who see yourself in Generation Now – you have an opportunity to lead and shape everything from relationships to new models to emerging technologies. Those of you who helped make this industry what it is today have the opportunity to apply your experience to the coming changes and ensure a vibrant future for your firms. Now is the time to start pursuing that future,” said Clark in closing. “You’ve grown this industry to $4 trillion in assets. You are on top of your game. We know it. Your competition knows it. Most importantly, your clients know it. Now – let’s bring it to the next generation of investors.”

About the Charles Schwab Generation Now Study for RIAs

Charles Schwab Generation Now Study for RIAs was conducted for Schwab Advisor Services™ by Egg Strategy, a strategic research firm. The study, which was released in 2014, included 40 participants, men and women ages 30-45 with earned or inherited investable assets of $500K (excluding real estate and business holdings), or a household income of at least $150,000. The term Generation Now reflects the immediate opportunity that this incoming cohort of high-net-worth investors may represent for RIAs. All data was self-reported by participants and not validated or verified. Egg Strategy is not affiliated with nor employed by Charles Schwab & Co., Inc. Investors participated in this study between March 24, 2014 and April 11, 2014.

An executive summary of the Charles Schwab Generation Now Study for RIAs is available at:

About the Independent Advisor Outlook Study

The Independent Advisor Outlook Study, conducted for Schwab Advisor Services by Koski Research, has a 3.65 percent margin of error. Koski Research is not affiliated with nor employed by Charles Schwab & Co. Inc. All data is self-reported by study participants and is not verified or validated.

For the November 2014 report, advisors participated in the study between September 10 and September 23, 2014. For the June 2014 report, advisors participated in the study between April 15 and May 6, 2014.

Detailed findings can be found at

About Schwab Performance Technologies

Schwab Performance Technologies® (SPT) is a subsidiary of The Charles Schwab Corporation and a leading provider of portfolio management and accounting solutions to approximately 3,800 independent financial advisors and investment managers. PortfolioCenter®, PortfolioServices, and Schwab OpenView Integrated Office™ are products of SPT. An open architecture firm, SPT provides services to all independent advisors regardless of custodial relationships. SPT also supports third-party outsourcing providers that use PortfolioCenter as the basis for their offering. More information is available at

Schwab Advisor Mobile Connect is a product of SPT. SPT and Schwab are affiliated as separate subsidiaries of The Charles Schwab Corporation, but their respective products and services are independent of each other. Schwab is a registered broker-dealer that provides brokerage services, while SPT licenses software and provides related technology products and services.

Schwab Advisor Portfolio Connect is a product of SPT.

About Schwab Intelligent Portfolios™

Schwab Intelligent Portfolios will be made available through Schwab Wealth Investment Advisory, Inc. (SWIA), which has filed an application with the SEC to register as an investment adviser. Portfolio management services will be provided by Charles Schwab Investment Advisory, Inc. (CSIA). SWIA, CSIA, and Charles Schwab Bank are affiliates of Charles Schwab & Co., Inc. and subsidiaries of The Charles Schwab Corporation.

Follow IMPACT 2014 news & updates @Schwab4RIAs #SchwabIMPACT

About Schwab

At Charles Schwab we believe in the power of investing to help individuals create a better tomorrow. We have a history of challenging the status quo in our industry, innovating in ways that benefit investors and the advisors and employers who serve them, and championing our clients’ goals with passion and integrity.

More information is available at Follow us on TwitterFacebookYouTube, and LinkedIn.


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For general informational purposes. Through its operating subsidiaries, The Charles Schwab Corporation (NYSE:SCHW) 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, 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; compliance and trade monitoring solutions; referrals to independent fee-based investment advisors; and custodial, operational and trading support for independent, fee-based investment advisors through Schwab Advisor Services. Its banking subsidiary, Charles Schwab Bank (member FDIC and an Equal Housing Lender), provides banking and lending services and products. More information is available at and

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1 Schwab Independent Advisor Outlook Study, June 2014
2 Schwab Independent Advisor Outlook Study, June 2014
3 Cerulli Quantitative Update – Retail Investor Product Usage, 2011, page 247



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