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Schwab Independent Advisor Outlook Study: The Future of the RIA Industry

The RIA industry has accelerated changes that may have lasting impacts for clients and advisors alike.

Technology growth in 2020 has been accelerated by the health crisis. This has been viewed as an overall benefit to advisory firms, but this optimism comes with some exceptions.

Charles Schwab's latest Independent Advisor Outlook Study released on Oct. 27 surveyed more than 1,300 independent advisors for an analysis of how the financial services industry has been evolving. The key theme was how technology has played a game-changing role and has disrupted the industry at an accelerated pace.

We explored the findings to understand the current state of the independent advisory industry, how it has been impacted as a result of the pandemic and what changes will endure past the health crisis:

• Technology and the evolution of financial advisory services.
• Advisors' new focus: the client experience.
• Independent advisors face several obstacles.

Technology and the Evolution of Financial Advisory Services

Technology has enabled us to connect with others and increase the rate at which we do so. The transition into the digitization of financial advisory services has become essential in conducting business as a consequence of the pandemic since we cannot physically meet one another. This face-to-face interaction is a basic tenant of the registered investment advisor (RIA) business and has been taken away to abide by health guidelines.

But technology has allowed advisors to repurpose the way they interact with their clients by engaging with them through a virtual setting. This new way of interacting with existing and new clients may bring about changes to the RIA business model – not only how advisors interact with clients but also how teams interact with one another, bringing about changes in workflow processes, investments in new technologies and other business areas to support an updated work model.

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