Despite this year's arduous business environment, independent RIAs remain optimistic, according to the results of Charles Schwab's 2009 RIA Benchmarking Study. In fact, 84% of advisers surveyed expect to grow moderately or faster over the next five years, with 35% predicting aggressive growth and 49% seeing growth at a more modest pace looking forward.

Advisers expect three main aspects of their business to be integral to their growth over the next five years: closing the deal after meeting with a prospect (75%), maintaining quality and consistency in their client relationships as they add more clients (73%) and implementing new technologies that will automate processes and build scalability (67%).

And adding new clients they are. In 2008, the median new client growth rate was 5%-an impressive feat given the recessionary environment, though down from 9% in 2007 and 8% in 2006. Firms in the 80th percentile and above added new clients at a rate of 12% or higher.

Referrals-including those from existing clients, professional colleagues and even custodial programs-remain the No. 1 source of new business. More than half (54%) of new business originated from clients, though many advisers fail to sufficiently seek out this type of referral.

"While 97% of firms in our study cite client referrals as a key tactic for growing their firm, a much smaller percent of firms are proactive in pursuing referrals and have a formal process in place that builds on their existing relationships," said Trish Cox, chief operating officer of Schwab adviser services. "That is a missed opportunity for firms seeking to grow."

Advisers also acknowledged barriers that could significantly impede their growth over the next few years.


(c) 2009 Money Management Executive and SourceMedia, Inc. All Rights Reserved.

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