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Charles Schwab

Technology a Top Priority For RIA Growth

Independent registered investment advisors are optimistic about the state of the industry after a six-year bull market, according to new research from Charles Schwab Advisor Services, and firms named the adoption and integration of new technology as their top priority for growth over the next five years.

Seventy percent of the 629 RIAs surveyed said technology helped them deliver a better client experience, while two-thirds said it created efficiencies that make the firm more profitable. Sixty-four percent said technology frees up time for advisors to spend more time with their clients.

Nearly half of firms plan to use a robo-advisor to target next generation clients, and 43 percent said they would use one to target investors with less than $100,000 in investable assets.

Credit: Charles Schwab Advisor Services | Click to Enlarge

“Strategic plans for today’s RIAs are not complete without strong consideration for the role of technology – not only in helping to attract a new generation of clients, but also as a driver of competitive and differentiated client service to build business scale and efficiencies,” said Bernie Clark, executive vice president and head of Schwab Advisor Services.

In addition to spending on technology, 20 percent of RIAs said they are investing in training employees to fully leverage technology in workflows.

“It’s clear that the environment in which we operate is changing,” Clark said. “From emerging clients and the next generation of advisors, to new technologies that change the way firms work, RIAs have the opportunity to capture an increased share of the affluent market and to take decisive actions now to lay the groundwork for their firm well into the future.”

Besides technology, firms identified differentiation in the market and adding staff as important for growth. More than half of firms are hiring; those with more than $500 million in assets are hiring more aggressively than smaller firms.

When hiring, 57 percent of firms are prioritizing a more diverse workforce in terms of age, gender and race. 

“Attracting, growing and keeping clients is directly linked with a firm’s ability to first put together the right client teams – teams that reflect the diversity of the firm’s client base, and that brings a powerful combination of high touch relationship and technical skills,” Clark said.

Overall, 93 percent of RIAs believe the industry is on a continued growth trajectory and more than half said the industry hasn’t fully matured and would grow at a faster rate than the market. 

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