Leader of Schwab Advisor Services Calls on RIAs to Defend Vigorously against Complacency, Beware the Speed of Change and Make Calculated Decisions for Future Growth

Thursday, June 25, 2015 8:30 am PDT



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"We understand that your clients want a relationship, and often, the convenience of technology to enhance their experience"

LAGUNA NIGUEL, Calif.--(BUSINESS WIRE)--Speaking from the main stage to a group of nearly 180 independent registered investment advisors (RIAs) at its annual EXPLORE™ conference today, Bernie Clark, executive vice president and head of Schwab Advisor Services, commended them on their continued growth, noting that “the industry is in a position of undeniable strength.” He also struck a tone of urgency, telling advisors complacency has no place in the RIA industry given the exponential increase in the speed of change and the knowledge that the ways in which advisors compete and serve clients today will be different tomorrow.

During the course of his remarks, Clark commented on the industry’s success and the fact that RIAs have won the trust of clients -- evidenced by the average 97 percent retention rate1 of clients year-over-year that advisors report and by the fact that client referrals continue to drive organic growth.

“You continue to come out on top and I am confident you’ll continue to win,” said Clark. “Your clients have voted with their most important asset: their life’s savings and the financial well-being of their families. What you have done resonates with them and motivates them to refer their family and friends to you. With the wind at your back, you have freedom to take calculated risks, but also a deep sense of responsibility to make good decisions so your firms can continue to grow.”

Clark’s optimism for the future of the industry is echoed by advisors. According to the findings from the latest Independent Advisor Outlook Study (IAOS), released today from EXPLORE, 93 percent of RIAs believe the industry is on a continued growth trajectory, with more than half (53 percent) saying the industry has not fully matured and will continue to grow at a higher rate than the market.

Navigating change: Technology and clients, talent and regulation

“External forces like changing demographics and regulatory uncertainty can seem like remote threats as you go about the business of serving clients and managing the growth you are experiencing today,” said Clark. “But that doesn’t make them less important.”

To this end, Clark shared news and updates on several areas where Charles Schwab is currently championing advisors’ interests in a changing world, including:

Charles Schwab announced earlier this week the availability of a new automated investment management platform, which was built to meet the needs of RIAs, and will enable firms to reach broader market segments and scale their businesses, while complementing the invaluable wealth management services and client experience they provide today.

Institutional Intelligent Portfolios, sponsored by Schwab Wealth Investment Advisory, Inc., offers RIA firms flexibility across portfolio construction, ETF selection and branding for their clients’ experience. Firms can create their own set of portfolios, reflecting their investment philosophy and offering more than 450 ETFs across 28 asset classes and all major fund families. Those ETFs represent more than 80 percent of the total ETF assets currently held by advisors’ clients at Schwab, and cover nearly 100 percent of advisors’ clients’ assets invested in ETFs selected for the 28 asset classes represented in Institutional Intelligent Portfolios.

“We understand that your clients want a relationship, and often, the convenience of technology to enhance their experience,” said Clark. ”There isn’t a ‘one size fits all’ answer for how your clients want to invest. You are entrepreneurs -- we know you will make this yours and it will be exciting to see how you do it.”

  • Inaugural class graduates from Schwab Executive Leadership Program

Clark shared that 32 RIA firms have graduated from Schwab’s Executive Leadership Program, which launched in 2014. The program is specifically designed to prepare the next generation of RIA firm leaders, and an additional 34 firms are currently participating in the second consecutive year-long program.

Clark spoke about the critical importance of talent at all levels of a firm, saying, “The RIA industry needs strong future leaders and more diversity. There are also barriers to entering the industry, so we must work extra hard to increase the awareness of the RIA career path so that we can ensure a talent pipeline, and fuel your legacies for generations to come.”

He noted that IAOS revealed that equity ownership is now offered by 30 percent of firms today and, in larger firms, more than half offer it, which “bodes well for development and retention and can help you attract future leaders to your firm.”

IAOS also found that, as they seek to add staff, 57 percent of RIAs consider it a priority to create a more diverse workforce (i.e., age, gender and race), including 28 percent who report they have already taken action to hire diverse employees.

  • Advocating for RIAs on Capitol Hill

Clark reminded advisors of the importance of having their voices heard and helping shape legislation and regulation.

“More than other external factors, regulatory changes can affect your firm and put pressure on the foundation you’ve built,” said Clark. “Just two weeks ago, we were in D.C. along with several advisors to help educate Congress about the RIA model, so that those in Washington understand issues like advisor examinations and the fiduciary standard, and realize that the independent advisor businesses cannot be regulated the same way as in the more traditional models.”

“The things I have asked you to think about today are, in my view, as important as the choice you made to go independent,” said Clark. “My commitment to you is that Schwab Advisor Services will lead – we will work hard to create opportunities for you and bring you best practices, technology and actionable insights that fuel growth.”

For general informational purposes only.

About the Independent Advisor Outlook Study

The Independent Advisor Outlook Study, conducted for Schwab Advisor Services by Koski Research, has a 3.9% margin of error. Koski Research is not affiliated with nor employed by Charles Schwab & Co., Inc. All data are self-reported by study participants and are not verified or validated. Advisors participated in the study between April 28 and May 11, 2015.

Detailed findings can be found at http://www.aboutschwab.com/press/research.

About Charles 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 www.aboutschwab.com. Follow us on Twitter, Facebook, YouTube and LinkedIn.


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 SIPC, www.sipc.org), 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 www.schwab.com and www.aboutschwab.com.

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1 Schwab 2014 RIA Benchmarking Study


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