The inflection point in the RIA industry described this week by the head of Schwab Advisor Services will involve larger firms making bigger deals.

In the last decade, as the size of the profession tripled, $500 billion changed hands through RIA mergers and acquisitions, Bernie Clark, executive vice president, told advisors during a Tuesday keynote at Schwab’s 2019 IMPACT conference in San Diego – and traditional brokerages are changing to look more like RIAs.

“Traditional models want to be more like you, but will they ever be all-in on this space? I see no evidence of material changes in their models,” said Clark. “I see them working around the fringes trying to look like you, but not necessarily trying to be like you.”

Clark pointed to mega-deals like Goldman Sachs’ acquisition of United Capital and the rapid inorganic growth catalyzed by firms like Focus Financial Partners, Hightower and and Dynasty Financial Partners as signs that the RIA industry has entered a new phase of growth.

But it’s not just acquisitions driving large-firm growth – Jon Beatty, Schwab chief operating officer, said that the top quintile of RIAs saw organic growth rates nearly four times that of other firms. Most of this growth has come from the acquisition of new-to-firm households.

“The number of firms on our platform managing more than $1 billion has grown by 86%,” said Beatty.

Moving forward, technology and talent will serve as additional catalysts for RIA growth, said Clark.

Clark and Schwab CEO Walt Bettinger also discussed the firm’s decision to eliminate fees on stock and ETF trades.

“There are barriers to investing: The person starting out saving $100 a month into four or five ETFs, they can’t have 20% to 25% of their principal taken away for commissions,” Bettinger said to his advisor audience. “It’s a virtuous cycle: We disrupt on behalf of our clients, you as well as the end investor. In return you and the end investor choose to bring us more business, and that leads to better financial results and better metrics, which we then try to turn around and share back in appropriate proportions.”

Schwab announced plans to drop trading fees on Oct. 1, and was quickly followed by competitors such as Fidelity and TD Ameritrade. According to Bettinger, it was a decision come to after 20 years of planning.

Bettinger said that in a future without transaction costs, price will no longer be a differentiator within the industry and more end-investors will begin to question whether they want to work with firms still charging commissions in any form.

Later in the session, Chairman and founder Charles Schwab said regarding commission that in 20 years, “no one would know what they were.”

“That’s when you can take advantage of it,” he said. “There are a lot of tentacles that could come out of this move: consolidation is a possibility. The focus on brand, trust, client experience – all of that will come to the forefront.”

Clark and Bettinger also announced that Schwab would expand its lending business for financial advisors, including loans to advisory firms, mortgage lending and unsecured loans for clients.

Schwab also revealed that the company will introduce a new income management service for retirees within the next year.

“We’re not ready yet, but next year we will roll that out,” said Schwab. “You have that capability to help your clients learn how to manage and come up with their own paychecks. Smaller investors will want that, too. Many advisors will want to have that as a tool to help out elder people.”