Schwab Independent Advisor Outlook Study Indicates Advisors Remain Optimistic Despite Challenges of COVID-19 Environment
Schwab recognizes the efforts of the entire independent advisor community with special IMPACT® Award
More than 1,300 independent advisors responded to the study, fielded in August, and the overwhelming majority (91%) expect continued growth for their industry. Among the top growth drivers: preference for the independent model versus other models (64%) and robust platforms and technology that make it easier to go independent (20%).
“This year has challenged us as an industry and accelerated the pace of change, but independent advisors have demonstrated that they were made for this moment,” said
While long-term optimism remains high, advisors have unquestionably felt an immediate impact from COVID-19 on their firms. While most advisors (82%) still expect growth this year, almost half (42%) expect lower growth in net new assets this year compared to original projections. The average expected growth rate in new assets by the end of 2020 is now 11%. Most growth (93%) will come from organic sources (existing and new-to-firm clients) versus inorganic growth (e.g., M&A activity).
Top business challenges due to COVID-19 include planning in an uncertain environment (36%), clients’ ability to use technology to connect virtually (35%), and achieving client investment return goals (32%). Moreover, both advisors (78%) and their clients (86%) are concerned about a continued recession through 2021.
Opportunity and long-term changes
Advisors see inherent opportunities due to COVID-19. More than half of advisors (57%) believe it has provided a greater opportunity to demonstrate client service and relationship focus. More than a third of advisors also cite opportunities to leverage technology to seamlessly work remotely, the ability to differentiate from competition, and the opportunity to develop better client relationships.
They also see lasting changes as a result of the current situation, especially a reduced need for office space (57%), distributed/remote staff (49%), and a continued virtual approach to business development and sales (44%). Almost half of advisors (47%) expect that the increased use of video-enabled meetings with client and prospects is a permanent change.
“Advice has never been more important than it is today,” said Clark. “As we emerge from this period of uncertainty, demand for the fiduciary model will remain strong, particularly among high-net-worth investors. This industry still has a lot of room to grow, and Schwab is going to be there to support all advisors’ success every step of the way.”
Recognizing a year of perseverance
In light of the significant challenges advisors have successfully navigated in 2020, Schwab dedicated its annual IMPACT Awards® program to acknowledging their incredible efforts during this time. Schwab is recognizing the entire community of firms at IMPACT with a
“The passion, purpose, and commitment of independent advisors has never been so evident as in 2020,” said Clark. “We are thrilled to appreciate all of the advisors attending IMPACT as IMPACT Award winners in this unprecedented year. We also want to acknowledge IMPACT Award winners of the past 15 years for their leadership in getting the industry to where it is today.”
Since the debut of the IMPACT Awards in 2006, Schwab has recognized 52 firms and donated more than
For real-time Schwab IMPACT® 2020 information and highlights, follow @Schwab4RIAs and #SchwabIMPACT.
About the Independent Advisor Outlook Study
The Independent Advisor Outlook Study (IAOS) is conducted for Schwab Advisor Services by
Current results reflect responses from 1,347 independent investment advisors who custody assets with Schwab representing a total of
Detailed findings can be found at www.aboutschwab.com/research
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.
Through its operating subsidiaries,
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. For informational purposes only.