While the RIA industry has tripled in size since 2009, the $5 trillion business finds itself at an inflection point as it prepares to enter a new decade. That was the message of Bernie Clark, executive vice president and head of Schwab Advisor Services, as he addressed more than 2,200 advisor clients attending Schwab’s annual IMPACT conference in San Diego today.
Given this impressive pace of growth, Clark said many advisors expect that their growth will continue. A benchmarking survey conducted by the nation’s custodian released at the event found a majority of advisors, or 92%, expect the industry to continue to grow. Remarkably more than a third, or 37%, think it will continue to grow at a faster rate than the market.
Despite strong equity markets, most RIAs see organic growth as the key driver of their top line revenues. Fully 94% of RIAs participating in the survey believe their firms will enjoy growth in net new assets over the next year with 90% of it coming from organic growth.
The three top biggest challenges to growth include new forms of competition, rising costs and distinguishing their firms from a slew of rivals.
“With all the opportunity that comes with that, there’s also more change, faster change, and more challenges,” Clark told advisors. “in a world where things are seemingly more the same, nobody else is you.”
Advisors have watched the rise of robo-advisors in recent years and Schwab Advisor Services’ chief operating officer, Jon Beatty, told attendees that the RIA and advice industries were likely to grow “broader” over the next decade.
According to the benchmarking survey, advisors are studying operations, technology and client acquisition as areas of their business that could enhance their competitive advantage.