Majority of Investment Advisors Expect an Increase in Advisors Moving to Independence, According to Charles Schwab Survey

More than half of surveyed investment advisors find the idea of becoming an RIA appealing; Even stronger interest from those under age 40

Tuesday, February 28, 2012 8:00 am PST



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"The survey results reinforce the client-service orientation of advisors considering independence and the responsibility they feel to meeting their clients’ needs"

SAN FRANCISCO--(BUSINESS WIRE)--As the investment advisory landscape continues to shift, a new Charles Schwab survey of advisors at major financial firms finds that more than three-fourths (76%) of those surveyed expect a continued increase in the number of advisors becoming independent registered investment advisors (RIAs), and more than half (51%) say that they find the idea of being an RIA appealing. Younger advisors show even more proclivity for independence, with 65 percent of those surveyed who are under the age of 40 finding the idea of becoming an RIA appealing, compared to 43 percent of those age 40 and over.

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 Tim Oden, senior managing director of business development at Schwab Advisor Services. “Also interesting to me is the appeal of the RIA model to advisors under 40 suggesting that the movement to independence isn’t just a flash in the pan, it’s more likely to be a long-term trend.”

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 Wall Street firms.

“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

Resources and insights for advisors considering a transition to the RIA model

Schwab Advisor Services has launched dedicated website content ( 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 March 28 at 1:00 p.m. PT to help advisors learn more about the independent model, explore their options, and get an assessment of the risks, benefits, and economic potential associated with becoming an RIA.

In addition, the latest Schwab Talk blog post features Tim Oden discussing steps to consider when transitioning to independence. Schwab will also host a Twitter Q&A with Tim Oden to answer questions about making the move to the RIA model. Follow @Schwab4RIAs for information on how to submit a question, as well as guidelines for participating.

About the Survey

Over 200 financial advisors participated in the survey, conducted by Koski Research from December 3-18, 2011. Those surveyed work at major full-service firms and manage a minimum of $10 million in assets. Sixty-four percent of the advisors in the survey have more than 10 years of investment advisory experience.

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

Experiences shared are not a guarantee of future success and may not be representative of your experience.

About Charles Schwab

The Charles Schwab Corporation (NYSE:SCHW) is a leading provider of financial services, with more than 300 offices and 8.6 million client brokerage accounts, 1.5 million corporate retirement plan participants, 787,000 banking accounts, and $1.74 trillion in client assets as of Jan. 31, 2012. 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 Schwab Advisor Services. Its banking subsidiary, Charles Schwab Bank (member FDIC and an Equal Housing Lender), provides banking and mortgage services and products. More information is available at and (0212-1481)

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INFOGRAPHIC: The Move to the RIA Model (Schwab)

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