Client Retention is Not a Barrier When Going Independent, According to “Sophomore Year” Advisors Who Custody with Schwab

Schwab Advisor Service’s new RIA Economic Discovery Tool designed to help advisors make informed decisions before moving to independence

SAN FRANCISCO–(BUSINESS WIRE)– While retaining clients remains one of the top three most important areas of focus for advisors when making the move to the independent model, advisors who have been independent for less than two years say the majority of clients stick by their side once they make the switch, Schwab Advisor Services learned from a series of recent interviews¹ with forty “sophomore year” independent registered investment advisors (RIAs) who custody with the firm. Not only do clients agree to transition with their advisors as they seek independence, but most are immediately on board when told about the change.

According to industry research², the RIA industry has witnessed an eight percent annual growth rate, more than doubling industry assets under management, from $1.3 trillion to $2.8 trillion over the past 10 years.

“As one of the fastest growing segments of the financial services industry, it is clear that the appetite for independent advice is expanding as more and more advisors turn to the RIA space,” said Jon Beatty, senior vice president, sales and relationship management with Schwab Advisor Services. “With industry growth comes more choice for advisors as they seek out a path to independence. Schwab works one-on-one with advisors to determine which solution is best for them, evaluates the economics, and helps develop a transition plan tailored to their needs.”

In the interviews, most advisors noted “the ability to provide more personalized service to clients” as being a very or somewhat important aspect in the decision to become an RIA, followed by “the preference to work for yourself.” Also important was the need to “protect their personal reputations” by moving to the independent model.

Supporting Advisors in the Move To Independence

Schwab helps advisors explore options for independence as they determine whether it makes more sense to start a firm or join one. Schwab’s dedicated Advisor Transition Services team then collaborates with the advisor to develop a customized plan for their specific circumstances.

In its most recent effort to advance the understanding of the model’s benefits, Schwab launched a campaign ─“Don’t change your ways. Change your world.”─ for advisors …read more

Source: FULL ARTICLE at DailyFinance