RIAs are growing larger as they attract a wealthier clientele, according to a study by Charles Schwab.

“The independent advisors who participated in our study are clearly thriving and growing across all of the key business indicators that we can imagine,” says Jon Beatty, senior vice president of sales and relationship management at Schwab Advisor Services.

The median AUM for a firm on the Schwab Advisor Services platform grew to $593 million in 2016 from $358 million in 2012, according to the latest RIA Benchmarking Study from Schwab. Firms of all sizes have enjoyed a median 10 percent compound annual growth rate in AUM over the past five years, the study said.

The growth in AUM coincides with a 5.2 percent compound annual growth rate in median client relationships over the past five years, from an average of 266 clients in 2012 to 357 clients in 2016. Similarly, RIAs grew median revenue from $2.3 million in 2012 to $3.5 million in 2016, the study said.

Independent firms continue to pick up assets from high-net-worth investors, with the average client relationship increasing in size from $1.6 million in 2015 to $1.8 million in 2016, according to Schwab.

“High-net-worth investors with complex financial needs are seeing the value in what independent advisors are bringing forward,” says Beatty. “I’ve been in this business for 20 years and each year we’ve seen this steady, regular move towards the wealthier investor. It’s because the fiduciary model really works best with clients that have a lot of complexity.”

While many financial advisory firms are leveraging technology to create enough scale to serve down-market investors with lower net worth, that trend has not yet translated into lower per-client AUMs for independent firms, says Beatty.

Larger firms generally work with larger clients, according to Schwab. Firms with more than $2.5 billion AUM reported an average client size of more than $3 million, while firms with $100 million to $250 million reported an average relationship size of $1 million.

The fastest-growing firms in Schwab’s analysis were able to generate an additional 3.6 percent of new asset growth in 2016. These firms onboarded a median of 31 new clients in 2016, more than 1.5 times as many as other firms. The fastest-growing firms also added a median of $45 million in AUM from new clients in 2016, compared to a median of $23 million for all other firms.

Firms are relying on referrals as their primary client acquisition strategy, according to Schwab. Moving forward, 42 percent of the firms researched will acquire new business via client referrals, and 30 percent will acquire clients through business referrals, making referrals the most commonly named growth and planning initiatives among firms on Schwab’s platform.

At the fastest-growing firms, referrals from clients and centers of influence accounted for 5.8 percent of new asset growth, compared to 2.7 percent at all other firms.

While referrals remain the dominant form of prospecting and asset gathering, firms that combine referrals with a marketing strategy attract assets 2.4 times faster than their peers.

“It’s a mix of reputational marketing, behavioral efforts around client referrals and cultivating centers of influence within the community that create the best opportunities to talk to prospective cleints,” says Beatty.

Schwab analyzed self-reported data from 1,321 firms that custody assets with Schwab Advisor Services.