The Advisory Career

Independent Advisors Must Embrace A Broader Role in Helping Clients Navigate a Rapidly Changing World

Consider the impacts of the healthcare industry, artificial intelligence and evolving workforce dynamics

Fresh ideas and new perspectives on the advisory career challenges, from the Schwab Impact Conference, held this week in Chicago.

November 15, 2017– CHICAGO–(BUSINESS WIRE)–SpeakingWednesday in front of a crowd of nearly 5,000 attendees at Schwab’s IMPACT® conference in Chicago, head of Advisor Services, Bernie Clark said that “an increasingly important part of your future role as advisors will be helping clients determine when to create change… and when to see aspects of change they might not be considering.”

Clark evoked the healthcare industry, artificial intelligence and evolving workforce dynamics to illustrate that advisors must embrace a broader role in helping their clients navigate the forces of change.

In his remarks from the main stage at the nation’s largest and longest running conference for independent registered investment advisors, Clark encouraged advisors to “understand more about which changes will matter most to your clients” by asking “bigger questions” and expanding areas of expertise.

Beyond planning and portfolio management

“Go beyond financial planning and portfolio management,” said Clark. “Expand your circle of influence to include new experts with different specializations. Think about bringing on people who aren’t typical financial hires and be ready to provide counsel and connect your clients to the right resources.”

According to the results of the latest Schwab Independent Advisor Outlook Study, also released today at IMPACT, advisors are actively thinking about what skills they will need in their businesses going forward. Eighty-two percent of advisors report that they are seeking employees with “people skills” versus 18 percent who are looking for employees who are “skilled with numbers.” Moreover, the top three backgrounds considered valuable in candidates are communications, sales and consulting.

Schwab celebrates 30 years of serving independent advisors

Schwab Advisor Services marks 30 years of formally serving independent investment advisors this year. Today Schwab works with more than 7,500 independent advisors and has more than $1.4 trillion in assets under custody.1

“A lot has happened in those 30 years. But despite tremendous change, the core things that people care about will never change – family, relationships, personal and professional fulfillment, health, and security,” said Clark. “Another thing that doesn’t change: the value of independent advice. Your model will continue to resonate. You are why your clients will be able to successfully deal with change, put it to work for them, and adapt to strategically build prosperous futures for themselves and their families.”

Excerpts from the Independent Advisor Outlook Study

Don’t call me an entrepreneur… I am a business owner
Schwab asked advisors who own their firms whether they considered themselves ‘entrepreneurs’ (prepared to take risks, never satisfied with the status quo, following my passion) or ‘business owners’ (emphasis on mitigating risk, value planning and preparation, building a stable business):

Don’t call me an entrepreneur... I am a business owner

  • Business Owner: 73%
  • Entrepreneur: 27%

The Business Owner Mindset:

  • Deep Personal Commitment – 60% of ‘business owner’ advisors see their business more as a reflection of themselves and a part of their families, communities and personal history vs. being an asset that is being developed and prepared for market Deeply personal commitment
  • In it for the long term – 90% of ‘business owner’ advisors do not plan to sell or transition their business until they are ready to retire while one in four ‘entrepreneur’ advisors are more likely to sell their business and start another one
  • Focus on clients – Advisors who see themselves as business owners versus entrepreneurs are 1.5 times more likely to be excited by ideas that solve clients’ problems versus ideas that can create significant change in the overall market

The bull’s still running, but advisors show caution and clients seek reassurance

  • 41% – Two in five advisors expect the S&P 500 Index to decrease or stay the same in the next six months; continuing the overall trend of the past two years, even in the face of continued rising markets
  • 80% – The majority of advisors (80%) report at least some of their client base has needed reassurance in the past six months that they will be able to achieve their investment goals
  • 35% – One in three advisors believe it will be difficult to help clients achieve their goals in the current investment environment

Passive Investing:

I can offer more value-added services and better manage my clients’ performance expectations

Reasons passive investing strategies could be an OPPORTUNITY for RIAs:

  • A greater reliance on passive investing frees up my time to provide clients with valueadded
    services that fall outside the realm of traditional portfolio management 50%
  • Matching the performance of an index will help my clients have more reasonable
    performance expectations, and relieve some pressure I feel 41%
  • Passive strategies present an opportunity to engage a wider pool of potential investor
    clients 39%
  • Clients will be more inclined to turn to advisors for help / Client service will still be
    needed 5%
  • Will help differentiate active investment managers / will help us stand out from the
    crowd 5%
  • Passive investing is cyclical / as cycle ends, investors will rebound to active investing 4%
  • Helps reduce costs and fees 4%
  • Other 12%

The Independent Advisor Outlook Study is an online study conducted for Charles Schwab by Koski Research.




Koski Research is neither affiliated with, nor employed by, Charles Schwab & Co., Inc. The study was conducted from September 6 – September 17, 2017, and reflects the responses of 946 RIAs who custody their firm’s assets with Schwab. Participation is voluntary. A detailed report on the Study is available here.
About Charles 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 and LinkedIn.
1 As of October 20, 2017.
Schwab Advisor Services™ serves independent investment advisors and includes the custody, trading, and support of Schwab.
Independent investment advisors are not owned by, affiliated with or supervised by Schwab.