Schwab Advisor Services released its annual RIA Benchmarking Study, which analyzes RIA trends with respect to firm growth, financial performance, and operational best practices.
A number of interesting (and encouraging) items were included, most notably that RIA firms “entered 2020 from a position of strength with robust five-year growth trends across assets under management (AUM), revenue, and clients.”
Schwab reported that top RIA strategic priorities have remained consistent year-over-year: acquiring new clients, leveraging technology to improve productivity, and enhancing strategic planning.
With a continued focus on net organic growth that has helped “RIAs smooth the impact of volatile markets,” most firms are planning to hire in the next 12 months and are largely looking to poach talent from other RIAs.
The report also highlighted what it claims are guiding principles for advisory firm success, which include:
Effective planning and execution a leading indicator of success
“Growing a firm requires focus, strategic planning, and innovative mindset. Establishing a shared vision for the future, creating alignment, and driving effective execution power your growth engine and provide a clear understanding of the future and how you’ll get there.”
Value is defined through your clients’ eyes
“Firms thrive when focusing on the client experience from their clients’ point of view. When every person, process, service offering, and system maintains an extreme focus on your ideal client, you are able to differentiate your firm in an increasingly competitive landscape.”
Operational excellence creates greater capacity for clients
“Institutionalizing your business through technology and operations provides operational discipline, allowing you to maximize scalability, manage risk and build a solid infrastructure so that you can reinvest where it matters most—with your clients, protecting the trust that you’ve built.”
Your reputation is your brand
“Every aspect of your firm—employees, centers of influence, clients and even your digital presence—should effectively your firm’s reputation within the community you serve in a way that increases referrals and generates new business.”
People are your most important asset
“Creating a cycle of opportunity to attract and retain talent helps ensure continuity of your firm’s people, culture and values as you prepare for the future. That’s why having a high-performing and diverse team, unlocking their potential and rewarding and developing the next generation of leadership is a long-term commitment and critical to building a legacy.”
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
