Call to Advisors: Envision, Own and Shape Your Future

Schwab unveils initiatives to drive success in four key ‘call-to-action’ areas – clients, technology, talent and advocacy

November 14, 2013 – WASHINGTON–(BUSINESS WIRE)–“Think beyond the demands of now, remove the distractions and act with the future in mind” was the message delivered today by Bernie Clark, executive vice president of Charles Schwab & Co., Inc., and head of Schwab Advisor Services, to more than 1900 independent registered investment advisors (RIAs) gathered at the nation’s capital. Clark spoke from the main stage at IMPACT – the nation’s largest and longest-running annual gathering of RIAs – and his message was imbued with a sense of urgency, making the case that in order to see “your future clients, your future firm, your future industry” advisors must clearly envision what tomorrow will look like and act today to shape and prepare for it.

“It is fitting that we are meeting this year in Washington D.C., a place where people have come many times throughout our country’s history to activate a vision of the future – where they have spoken up, had an impact and effected change,” said Clark. “We’re here in force in Washington to stand up and stand out for the future of the RIA model and the best interests of investors.”

From next generation clients – called the “now generation” by Clark – to the RIA office and talent of the future, to the increased regulatory scrutiny on the horizon, Clark called on IMPACT attendees to see and own their future, saying that now is the time to lay the groundwork for tomorrow. He called on advisors to be guardians of the RIA model: “You MUST pass on your spirit of independence, service and entrepreneurship to the next generation of RIAs and clients.”

Overall, advisors are optimistic about the future. According to Schwab’s most recent Independent Advisor Outlook Study (IAOS), the findings of which were released this week, the majority of RIAs (70%) are very optimistic about the opportunities for growth in the next five years and, by a ratio of almost two to one, they are focused on positioning their business for future growth versus focusing only on current business needs.

A Shifting Competitive Landscape

In looking ahead though, 71 percent of advisors think there will be more competition for new assets five years from now. Interestingly, when asked about the top three competitors for their business today, participating advisors ranked other regional RIAs (74%), wirehouses (46%) and broker dealers (43%) at the top of that list. When asked which three competitors they expect will increase the most five years from now, they still cited other regional RIAs at the top (66%), but the number two and three spots shifted to national RIAs (51% – up from 34% today) and online investment advisories (45% – up from 17% today).

The study reveals advisors see competitive pressures on several fronts. Close to half (44%) expect regulatory changes to make other advisory models look more like independent RIAs, and the same number also believe the next generation of clients will seek advice from multiple advisors rather than consolidate assets with one advisor. Not surprisingly, almost two thirds of advisors surveyed (60%) believe the need to differentiate from the competition is greater than ever.

Alongside competitive pressures, advisors are also cognizant that they are part of an industry that is undergoing significant change as it matures. For example, according to the study, many (44%) believe investors 10 to 20 years in the future will want a different service model, but they say technology is changing so fast and the needs will be so different they are unsure what the new service model will be.

“We are both – RIAs and Schwab – driven by what we see when we look at the world through our clients’ eyes,” said Clark. “The independent model has always been about meeting the needs of clients. You are uniquely positioned to understand the evolving client and investing landscape. In order to cement your position you must take incremental steps now to embrace the new realities ahead.”

Outlining Schwab’s vision of the future – one where clients, the advisor office and the RIA industry itself will all be different – Clark called on RIAs to mobilize both as individual businesses and as an industry to define these changes on their own terms. He detailed four ways RIAs can take action now and announced how Schwab, as the leading provider of custodial, operational and trading support for RIA firms, will be helping them to do so.

Areas for Action

Connect with clients
Relationships will always be a cornerstone of success for RIAs, but Clark noted the next generation of investors will be “harder to engage, will know more than you think, and will expect to interact with you in very different ways.” To this end, Schwab is helping on two fronts:

  • RIA Stands For You Advisor Directory: An online database of RIAs where individuals can find an independent advisor. The database is part of the overall RIA Stands for You campaign, Schwab’s digital marketing effort launched in 2011, which educates investors on the value of the independent advice model. The directory is now live on RIA Stands For You and RIAs can sign up on the site, or at IMPACT by visiting the Schwab Center. To support the new directory, Schwab launched targeted banner advertising to drive investors to where they can search for an advisor in their area.
  • Schwab OpenView MobileTM: Recognizing that clients are increasingly using mobile devices, combined with the desire of many advisors to elevate their own firm’s brand, Schwab Performance Technologies® announced a customizable app that RIAs can use to create a turnkey, branded mobile presence enabling 24/7 connection with clients. Schwab OpenView MobileTM, with apps for both the Google Play and iTunes App Stores, is in pilot now and is targeting general availability in early 2014.
...the majority of RIAs (70%) are very optimistic about the opportunities for growth in the next five years and, by a ratio of almost two to one, they are focused on positioning their business for future growth versus focusing only on current business needs

Make technology a differentiator
echnology has become much more than simply the underlying infrastructure of an advisor’s business. It is the cornerstone of an advisor’s ability to meet client expectations for a “know me” experience along with ‘anytime, anywhere’ service. According to IAOS, 86 percent of advisors believe the next generation of investors will require an “anywhere, anytime” service model. Schwab also recognizes this, and in an effort to help advisors begin to shape the office of the future it announced:

  • Project PM2: As the largest provider of portfolio management software to RIAs, Schwab Performance Technologies has announced plans to develop a next generation portfolio management system called Project PM2.
  • Electronic Approval of Forms and Wires: Schwab announced two new pilots for tools that will enable advisors’ clients to electronically sign important forms and approve wires with a few taps on their mobile devices. These new tools – which will reduce paper, increase speed and efficiency, and improve security – are expected to be widely available early next year.

Clark also provided an update on Schwab Intelligent Technologies’TM OpenView MarketSquare, Schwab’s Zagat-style rating and reviews site for technology vendors. The site now has more than 650 reviews consolidated into 30 comprehensive product reviews and Clark called on RIAs to “check out the reviews, make sure you have the best vendor for your needs and rate the providers you already work with and share your experience.”

Find and cultivate the right talent
“Being prepared to serve clients well means having the best and brightest talent,” said Clark. “And Schwab is acting today to help in your efforts to recruit new talent and prepare the next generation of RIA leaders.”

Increasingly, advisors see the need to diversify their workforce in the future – a reflection both on the need to better reflect the demographics of coming generations of wealth and to address the aging of firm founders and principals. Clark pointed to the success of Schwab’s inaugural intern program this past summer, when 10 interns participated in a structured rotation though every part of Schwab’s business, including time spent onsite with RIA firms. Two of the 10 interns have subsequently secured positions at RIA firms and several are attending IMPACT this year along with nearly 50 students from seven universities. The intern program will be run again next summer.

Noting that preparing for the future is not just about new talent, Clark also provided an update on Schwab’s efforts to cultivate successors – the next generation of RIA firm leaders:
Executive Leadership Program – In January, Schwab will welcome the first 30 participants to its new

  • Executive Leadership Program, a one year program that will help prepare promising leaders to manage and grow RIA firms. The curriculum is customized for the RIA firm that is preparing itself for the future and will focus on five key competency areas: leadership, innovation, talent management, strategic marketing and entrepreneurship. It will leverage content and be delivered by guest lecturers from leading universities as well as provide insights from RIA firms themselves.

Advocate for the industry
“We all benefit if we join together to educate and advocate for the RIA model,” said Clark, and he called on RIAs to “stand up….write letters to your members of congress, visit them and tell them about your business and what makes your model so right for the investors you serve.” Advisors concur. Sixty-nine percent of IAOS respondents also believe it is important for RIAs to act together to advocate for the industry.

Taking the industry message to legislators and regulators: Capitalizing on the presence of IMPACT in Washington, D.C., Schwab has organized groups of advisors to visit Capitol Hill and the SEC to carry their voice on the most critical issues that the industry needs to tackle today, including the fiduciary standard and proposed rules harmonization.

  • Mobilizing the message: RIAs onsite at IMPACT will be able to participate in a letter writing campaign to their Members of Congress on topics including rules harmonization and the fiduciary standard.

“While it is important to be focused on the here and now, it should not become a distraction to our ability to also stop and see tomorrow. The future belongs to those who are able to envision a different tomorrow today, and be willing to the take steps today, no matter how small, towards that future,” said Clark.


About the Independent Advisor Outlook StudyThe Independent Advisor Outlook Study, conducted for Schwab Advisor Services by Koski Research, has a 3.21% margin of error. The IAOSreflects the opinions of more than 800 RIAs representing $228.5B assets under management. Koski Research is not affiliated with nor employed by Charles Schwab & Co. Inc. Detailed findings can be found at All data are self-reported by study participants and are not verified or validated. Advisors participated in the study between September 30, 2013 and October 4, 2013.

About Schwab
At Charles Schwab we believe in the power of investing to help individuals create a better tomorrow. We have a history of challenging the status quo in our industry, innovating in ways that benefit investors and the advisors and employers who serve them, and championing our clients’ goals with passion and integrity.

More information is available at Follow us on Twitter, Facebook, YouTube, LinkedIn and our Schwab Talk blog