RIAs will get a big thumbs up and a warning against complacency in a fast changing industry today from Bernie Clark, executive vice president and head of Schwab Advisor Services.

"I'm extremely optimistic about the future of independent RIAs," Clark said in an interview as he was preparing to address about 180 advisors at Charles Schwab's annual EXPLORE conference in Laguna Nigel, Calif. Thursday morning.

"The industry is in a position of undeniable strength," Clark plans to tell the advisors, designed to discuss critical industry issues in an intimate setting. "I am confident that you'll be able to win."

Clark cited an average 97% retention rate reported by RIAs in Schwab's most recent benchmarking study and the fact that 93% of RIAs believe the industry is on a continued growth trajectory, according to the firm's latest Independent Advisor Outlook Study.

But he also plans to caution advisors not to rest on their laurels.

"Complacency has no place in the RIA industry," Clark warned, "given the exponential increase in the speed of change."

External forces like changing demographics and regulatory uncertainty "can seem like remote threats as you go about the business of serving clients and managing the growth you are experiencing today," Clark will tell advisors, "but that doesn't make them less important."


Schwab's newly introduced Institutional Intelligent Portfolios automated investment management platform for RIAs will be high on the EXPLORE agenda.

"We understand that your clients want a relationship, and often, the convenience of technology to enhance their experience," Clark is set to tell advisors. "There isn't a 'one size fits all' answer for how your clients want to invest. You are entrepreneurs -- we know you will make this yours and it will be exciting to see how you do it."


The next generation of advisors and Schwab's executive leadership program, which launched last year, will also be discussed.

Over 30 firms had graduates in the program and 34 more advisory firms will participate this year, Clark said, stressing the need for "strong future leaders and more diversity."

Advisors also need to increase awareness of the RIA career path to ensure a talent pipeline, he added.

Equity ownership is now offered by 30% of all firms and more than half of larger firms, according to the new Schwab study, which, Clark noted, bodes well for development and retention and will help RIAs attract future leaders.

Clark said he was also encouraged by the study's findings that more than half of RIAs consider it a priority to create a more diverse workforce, and 28% report they have already taken action to hire diverse employees.


Clark also plans to remind advisors that they need to make their voices heard in Washington.

Regulatory changes can impact RIAs "more than other external factors," he said. Schwab executives were recently  in Washington  to make sure lawmakers understood issues like advisor examinations and the fiduciary standard -- and realized that the independent advisor business "cannot be regulated the same way" as more traditional models, Clark said.

Schwab will soon file a comment letter on the proposed rule change to the fiduciary standard to the Department of Labor.

The custody firm had "some challenges with what's been proposed," Clark said, including "the burden of cost on the individual."

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