How Did Independent RIA Firms Fare Last Year?

401k, retirement, RIA, practice management

Looking sharp.

The RIA channel continues to grow. More specifically, the “independent advisory industry remains on a growth trajectory” and outpaced the previous year’s gains, according to Charles Schwab.

Schwab’s 2018 RIA Benchmarking Study indicates AUM grew 16.2 percent in 2017 at the median versus 9.6 percent in 2016, and the five-year compound annual growth rate (CAGR) for AUM was 10.9 percent, from $358 million in 2013 to $652 million in 2017.

Meanwhile, revenue accelerated from $2.2 million in 2013 to $3.6 million in 2017, a five-year CAGR of 9.8 percent.

“Independent advisors have certainly enjoyed buoyant investment returns but have also grown their businesses organically and strategically, which positions them well for sustainable growth even in the face of market volatility,” Jonathan Beatty, senior vice president, sales and relationship management, Schwab Advisor Services, said in a statement. “Firms are fueling their organic growth by differentiating and marketing their value propositions, improving the client experience, and strategically expanding their service offerings to meet the needs of their ideal clients.”

The fastest-growing firms in the 2018 Study exhibited several key attributes:

“The most successful firms are focusing their ability to appeal to and meet the needs of their ideal clients,” Beatty added, “and they deliver their message to clients and prospects through strategic communication channels. With the success of this industry comes more competition, and the firms who thrive are those who effectively amplify their brands, invest in their people, focus on best practices and deploy the right technology to drive operational excellence and an optimal client experience.”

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