Lisa Salvi, Head of Business Consulting and Education for Schwab Advisor Services, joined Keith Black, Managing Director of RIA Channel, to discuss its annual RIA Benchmarking Study which tracks the growth rate of financial advisory firms.
In its annual survey of financial advisors, Schwab notes very robust growth in clients and assets. The top 20% of firms ranked in a quantitative performance index average an annual organic growth rate of over 12%. Firms experiencing this growth rate are likely to double their revenues every five years. Advisors who develop an ideal client persona, a client value proposition, and a written marketing plan gain 67% more new clients and assets than firms that do not prepare these strategic assets.
At the industry’s average growth rate, the median firm will increase assets from $540 million to over $1 billion in client assets over the next five years. To keep up with this growth rate, firms will need to hire 70,000 people who are currently not in the industry. Salvi notes that the industry can benefit by diversifying the age, gender, and race of newly hired talent. Schwab supports students who attend Schwab IMPACT, where advisors can meet and interview those interested in a career in a financial advisory firm.
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