Speaking last month at IMPACT, an annual gathering of independent registered investment advisers (RIAs), Schwab Advisor Services executive Bemie Clark underscored the importance of advisers leading their firms toward change while continuing to draw on their entrepreneurial spirit.
The important role of change was echoed by findings from the 20th edition of Schwab's Independent Advisor Outlook Study (
"Is change always necessary for us in the independent space?" Clark says. "If you want an enduring business that succeeds even if you walk away, then yes, you must change." He adds that firms must "lean into the next generation of clients and employees" and that advisers need to be aware that "it's hard to see the need for change when things are good."
According to IAOS, the independent advice industry has already changed considerably over the past 10 years, yet further transformation in how firms operate, the advice models used, and the composition of teams is on the horizon.
An evolving role
When asked to reflect on the past 10 years and to think ahead to the next 10, advisers report that they are increasingly focused on delivering comprehensive wealth management, instead of only offering portfolio management and asset allocation. Furthermore, six in 10 advisers say that implementing changes to their service model to meet evolving client needs is the most critical issue they face in the next 10 years.
"The role of the adviser is shifting, and today, it can include estate planning, tax prep, and legal work, even other value-added services like career and estate planning or life coaching . . . nothing is off the table anymore," Clark says.
Advisers report that client relationships continue to drive their growth, via referrals, as has been the case for the past decade.
More than three quarters of advisers believe technology will have a noticeable impact on how their firms operate during the next decade, and nearly all (94 percent) agree that technology will enable firms to serve clients more efficiently. Advisers also report that, compared with a decade ago, they aren't spending as much time working in their physical offices, and they expect that trend to continue.
Regarding the outlook for technology, Clark says, "In a business, you're always balancing new technology and the human touch, knowing that all the technology in the world can't model how a client feels or replace people. We need the best technology, but we can't let technology detract from relationships."
Advisers consider finding and retaining talent to be among the most critical business challenges during the next 10 years. Willingness to embrace change is the characteristic that eight in 10 advisers report being especially impressed by as they interview and hire younger employees.
Addressing the importance of attracting and developing top talent, Clark says that firms need employees who "have credibility," which he defined as "a combination of character plus competence."
Since 2007, through grants from the
In addition, throughout IMPACT, Schwab and the
Clark says Schwab will help advisers navigate both the challenges and opportunities before them and will continue to invest and innovate on the industry's behalf.
"We truly take pride in being champions of independence and of your future," he says. "Everything we do in this business begins and ends with you, your business, and the future of this industry in mind. We believe that collectively, we can continue to leave a mark on the world by improving the lives of the people we serve."
The Independent Advisor Outlook Study is an online study conducted for