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Schwab IMPACT 2019 Photo by Samuel Steinberger

Schwab Survey: The Eternally Optimistic Advisor

Far more than half are concerned about a recession, yet almost all say they intend to grow next year 20% on average and do so via new money, not through mergers or acquisitions.

Far more than half of financial advisors are concerned about the possibility of a recession, but they are not as concerned as their clients: They say more than eight out of 10 clients are concerned about a looming protracted economic slowdown.

According to Schwab Advisor Services’ Independent Advisor Outlook Study released at the Schwab IMPACT conference in San Diego, 83% of clients and 65% of advisors were concerned about a looming recession as of September of this year compared with 63% and 49%, respectively, in May. Forty percent of advisors say that their clients will have trouble reaching their financial goals in the current economic climate.

Schwab surveyed 942 independent advisors with combined assets under management of $366 billion.

Despite the fear, independent registered investment advisors are extremely optimistic about the future for their firms: 94% of advisors expect growth in net new assets next year and expect to grow, on average, 20%.

Even more optimistic: Only 10% expect to grow by merging with another RIA or adding advisors with clients to their existing firm. Over 50% expect to grow by finding new clients. Almost four in 10 expect growth to come from getting more business out of their existing clients.

Meanwhile, 59% of advisors at large firms, defined as having AUM of over $500 million, and 39% of advisors at smaller firms reported helping clients with the impact of cybercrime and needing more resources to provide this help.

Advisors also think it’s becoming more important to talk to clients about socially responsible investing and ESG, with 74% of advisors reporting that they needed to be fluent in these issues with millennials, 61% with Gen Xers and even 40% with baby boomers.

Moreover, the top three reasons advisors gave for why their clients came to them, as opposed to another RIA, differed substantially between millennials and the other generations. For millennials, it was important that the firm served other family members, used technology and—in third place—because they were attracted to the personal relationship they had with the advisor.

For Gen Xers and baby boomers, those “people” relationships came first, followed by understanding the client’s unique needs and the service model.


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