RIAs, how are you doing?

It’s natural to compare your efforts with peers and colleagues. The 2015 Schwab RIA Benchmarking Study (get here) “Represents the product of more than five years of strong performance by Registered Investment Advisors (RIAs), demonstrated by record revenues, impressive increases in total number of clients, and rising profitability.”

The Schwab study included 1,007 RIA firms representing nearly $750 billion in assets.

According to the report, which was published in the summer of 2015, the top priorities for RIAs were also the keys to year over year revenue growth:

  • Recruiting new talent

  • Institutionalizing the business

  • Improve productivity with new technology

  • Enhancing strategic planning and execution

  • Acquiring new clients through existing client and business referrals

A Study Summary

  • The median operating margin of RIAs was 27%.

  • 42% of RIAs doubled their revenues and half increased their AUM by 75% or more since the bull markets of 2009.

  • The average account size was $3.9 million for more for half of firms, $3.9 million for the top firms, and $1.9 million for average firms.

  • For all firms, profitability rose 36% in the five years ended 2014.