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.

 

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