Schwab
Advisor Services released the results from a first-of-its kind
survey today examining the career paths of independent registered
investment advisors (RIAs) and the attributes of the profession that
attract talent into its ranks. Advisors in the study indicate being
drawn to the industry by: opportunities for relationship-based client
interactions, the ability to directly contribute to the growth of their
firm, and the potential for greater work/life balance. The RIA Talent
Study represents responses from 571 advisors who shared their
perspectives in four key career areas: becoming an RIA, being an RIA,
and career management and recruiting.
“The RIA business is highly relationship-oriented with a strong focus on
doing the right thing for clients,” said Neesha
Hathi, Schwab Advisor Services senior vice president. “Our study
results indicate that independent advisors indeed value the attributes
that have become the industry’s hallmarks. It’s also encouraging to see
younger advisors being drawn to the profession for many of the same
reasons as well as by the tremendous growth opportunities present in the
RIA industry.”
The RIA Talent Study examined the top reasons advisors selected a career
in the RIA profession and what drew them to the space. The study also
investigated certain characteristics of the RIA industry and the paths
most commonly taken to become an advisor.
Findings from four key areas in the RIA Talent Study include:
Becoming an RIA
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One in three (32%) of the advisors surveyed first heard about a
potential career in the industry from a colleague or friend. A
combined two thirds report that their current position is their
‘second’ (43%) or ‘third’ (21%) career.
-
When considering their career options, more than half of the
respondents report having looked at other investment-related firms
(including wirehouses and brokerage firms) prior to choosing a
position at an RIA firm.
-
This is particularly true of advisors under age 40. Thirty-five
percent of advisors under 40 considered a wirehouse firm before
working at their current RIA firm versus 26 percent of those aged
40 – 50 and just 11 percent of those over 60 years.
-
Prior to their current RIA role, approximately half of both men (55%)
and women (48%) advisors held a position as an advisor at another
financial services firm:
-
Women are more likely than men to have worked at other RIA firms
(38% vs. 27%).
-
Men are more likely than women to have also had roles in sales
(38% vs. 15%) and trading (35% vs. 16%), while women more often
held previous positions in operations (34% vs. 17%) or
administration (23% vs. 14%).
Being an RIA
-
The most important reasons reported for being an independent advisor
include working for a smaller company (49%), greater work/life balance
(47%) and greater earnings potential (41%). However, younger advisors
(those under 40) also report being attracted by the opportunity to
contribute to firm growth (55%) and the opportunity for greater career
advancement (47%).
-
Three quarters of advisors (76%) indicate having a long-term
commitment to the RIA industry, and the majority (58%) believes the
profession offers more challenges and opportunities for growth and
learning when compared to other types of models in financial services
(wirehouses, banks).
-
When it comes to skills that drive success in their roles, a strong
work ethic (44%), building and nurturing relationships (35%) and the
ability to develop the business/grow clients and assets (31%) are
considered to be the most important.
-
Women are more likely than men to emphasize the importance of
building/nurturing relationships (46% vs. 33%) and being
well-organized (32% vs. 19%).
-
Men are twice as likely as women to consider networking critical
to success (16% vs. 8%).
-
Ninety-three percent of advisors indicate that improving the financial
well-being of their clients is an important benefit of their RIA
career. This is followed closely by having the authority to make
decisions (81%), and having close and ongoing relationships with
clients (79%). The majority of the advisors surveyed believe they are
able to enjoy these outcomes in their current position .
Career Management
-
Independent advisors report that their firm actively invests in, and
provides support for, their individual career development.
-
This includes informal on-the-job training for the majority (70%)
while fewer report access to formal in-house training (10%).
-
When seeking new advisor talent, networking is a dominant means by
which firms find qualified advisors (60%), followed by cultivating
talent from within (32%).
Recruiting
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When it comes to recruiting policies that encourage a diverse
workplace, 69 percent of RIAs consider the industry to be about equal
with other types of financial services firms.
-
About half (49%) feel the RIA profession provides appealing career
opportunities to a diverse talent pool versus other types of financial
services.
“For today’s independent advisors, identifying, attracting and
cultivating diverse talent who understands and values relationships is a
strategic business imperative,” said Hathi. “By understanding the career
paths of advisors as well as the aspects of the profession that draw new
talent to it, RIA firms can better prepare for and capture the many
opportunities ahead.”
Complete results from the Schwab RIA Talent Study can be downloaded here.
Note: Select results from the RIA Talent Study will be included
as part of a live webcast: Executive Presence: Positioning Yourself
for Success, hosted by Neesha Hathi in partnership with the Center
for Talent Innovation (CTI) on Friday, Sept. 26 at 9 a.m. PT. The
webcast is designed for professionals looking to optimize their personal
executive presence potential and executives seeking practical advice and
tools to help mentor their employees and foster a culture that is
conducive to attracting and retaining female talent. Please click here
to register.
About the RIA Talent Study
The Schwab RIA Talent Study, conducted for Schwab Advisor
Services by Koski Research, has a 3.65% margin of error. Koski Research
is not affiliated with nor employed by Charles Schwab & Co. Inc. All
data are self-reported by study participants. Schwab did not
independently verify the responses. Advisors participated in the study
between February 4 and February 16, 2014. Qualitative interviews took
place in March, 2014.
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
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More information is available at www.aboutschwab.com.
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Disclosures
Through its operating subsidiaries, The Charles Schwab Corporation
(NYSE: SCHW) provides a full range of securities brokerage, banking,
money management and financial advisory services to individual investors
and independent investment advisors. Its broker-dealer subsidiary,
Charles Schwab & Co., Inc. (member SIPC,
www.sipc.org),
and affiliates offer a complete range of investment services and
products including an extensive selection of mutual funds; financial
planning and investment advice; retirement plan and equity compensation
plan services; compliance and trade monitoring solutions; referrals to
independent fee-based investment advisors; and custodial, operational
and trading support for independent, fee-based investment advisors
through Schwab Advisor Services. Its banking subsidiary, Charles Schwab
Bank (member FDIC and an Equal Housing Lender), provides banking and
lending services and products. More information is available at www.schwab.com
and www.aboutschwab.com.
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