A combination of demographic trends, changes in the ways that Americans expect to handle their financial affairs and emerging industry competitive pressures are driving an unprecedented pace of change in the day-to-day work of financial advisors.
In fact, according to a trio of top executives at Charles Schwab, there is good reason to believe that the already strong growth of the independent RIA model can be expected to accelerate further in the years ahead — allowing for an elevation of the open-architecture, fee-based fiduciary advice model and a diminution of the traditional captive wirehouse approach.
This was the case made by Walt Bettinger, Schwab's co-chairman and CEO, during the opening keynote address of the Schwab Impact 2023 conference, which he opened alongside Bernie Clark, head of advisor services, and Rick Wurster, president of the Charles Schwab Corp.
The event, in Philadelphia, brought together several thousand independent registered investment advisors with assets in custody on Schwab's platform. This year, the audience included many advisors who were formerly aligned with TD Ameritrade — a fact that the executives returned to repeatedly.
"The work that you do for your clients, by taking a fiduciary position and putting their interest at the forefront, it's simply a better mousetrap," Bettinger said. "The more educated and informed consumers become, the more attractive they find this model."
Clark said what today's top clients want is "real guidance," not product sales.
"To me the biggest trend is away from product and towards help and guidance," Clark said. "[Clients] want the expertise of an advisor — someone to help with investing, to integrate taxes, trust and estate work, and to think about the intergenerational transfer of wealth."
According to the Schwab executives, as more and more baby boomers retire each year, the demand for that type of advice will increase.
"All of you in this room are perfectly positioned to take advantage of this bull market for advice," Clark argued. "We really think fiduciary advisors are here to stay, grow and evolve within the marketplace. At Schwab, we accept and embrace change. Growth will come at us in different ways in the future."
RIAs Demand Expanded Services
According to Wurster, independent advisors working with Charles Schwab are pushing the firm toward improvements across various areas.
