WASHINGTON - Advisors will need a different service model for the future, Bernie Clark, executive vice president of Charles Schwab and head of Schwab Advisor Services, told more than 1,800 independent registered investment advisors Monday at the financial service giant's annual Impact conference in Washington, D.C.

The new model has to be able to serve clients "any time, any place and anyhow," Clark said. In order to see “your future clients, your future firm, your future industry,” firms must clearly envision what tomorrow will look like and act today to shape and prepare for it, Clark told the advisors.

With an eye to the future generation of clients, Clark said advisory firms will become more virtual, more mobile and more social. The boundaries of a firm's home city will become meaningless, and an online address will become more important than street addresses, he continued.

The advisor workforce will have to change, Clark said, becoming more diverse and younger, noting that only 19% of advisors are under age 40. "You will need people who reflect the demographics of your clients," he said.

While referrals will continue to be the lifeblood of the business, new clients will increasingly hear about advisors online, Clark declared, making a social media presence imperative. "You will need to be on Facebook, LinkedIn and Twitter," he said.

Indeed, advisors are expecting more competition to come from online advisors within five years, Clark said, citing Schwab’s most recent Independent Advisor Outlook Study, behind increased competition from regional and national RIAs.

To prepare themselves for the future, Clark urged advisors to  connect with clients, make technology a differentiator, find and cultivate the right talent and advocate for the industry.

The next generation of investors will be “harder to engage, will know more than you think, and will expect to interact with you in very different ways,”  Clark said.

He urged advisors to sign up for the RIA Stands For You Advisor Directory, the online database of RIAs where individuals can find an independent advisor, now live on the  RIA Stands For You website. To support the new directory, he added, Schwab has launched targeted banner advertising to drive investors to RIAStandsForYou.com, where they can search for an advisor in their area.

Schwab is also working on a customizable app that RIAs can use to create a turnkey, branded mobile presence enabling advisors to have continual connection with their clients, Clark said.

In order to also provide clients with an “anywhere, anytime”  portfolio service model, Clark said Schwab  is also developing a next generation portfolio management system called Project PM that will become part of the firm's custody platform in the cloud.

In addition, Schwab's Executive Leadership Program, a one year program that Clark said will "help prepare promising leaders to manage and grow RIA firms" is set to  get underway in January.

Read more:


Register or login for access to this item and much more

All Financial Planning content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access