Schwab States Its RIAs See Steady Growth & Richer Clients

Schwab States Its RIAs See Steady Growth & Richer Clients

The latest results are out for the Schwab Advisor Services’ 2017 RIA Benchmarking study, and notwithstanding the industry discussion about new competitive threats, the results are strong across the board for the RIA community. The median RIA on the Schwab platform grew at a 10% average annual compound growth rate over the past 5 years, as the median firm went from $358M in 2012 to $593M in 2016. Client growth was a somewhat smaller 5.2%/year of annualized growth, as the median RIA went from 266 clients in 2012 to 357 in 2016, suggesting that as RIAs grow in AUM, they continue to move further upmarket (larger average AUM per client). In fact, while the average client relationship overall rose from $1.6M in 2015 to $1.8M in 2016, the study found that firms with over $2.5B of AUM reported an average client size of more than $3M, compared to firms with $100M to $250M in AUM averaging only $1M per client. Other notable data points included: firms are still focusing on referrals (from clients, and centers of influence) as their primary planned growth strategy; companies are now combining referrals with other market strategies are growing 2.4X faster than their peers (and the “other marketing” strategies are producing as much new business growth as client referrals now!); and the larger the advisory firm, the more they’re looking to hire new financial advisors as relationship managers.


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