In the backdrop of a challenging 2022 economic landscape, where both stocks and bonds experienced unprecedented declines, the financial planning industry faced a significant decrease in Assets Under Management (AUM). Yet, despite these challenges, Registered Investment Advisors provided a highlight amidst the difficult times in the way of organic growth. 

Schwab recently released their 17th annual 2023 RIA Benchmarking Study, which surveyed 1,300 advisory firms, representing over $1.7 trillion in AUM. According to the study, organic growth was a bright spot in 2022, with assets from both new clients and existing clients reaching their second-highest point in the last 5 years. 

Becoming an RIA has emerged as a popular and compelling option over the past decade for advisors looking to break free. This is largely due to the RIA designation providing advisors with greater autonomy when it comes to their business and how they run it. The Schwab study shows RIAs use personalized investment strategies, such as direct indexing and thematic investing, to help tie meaning to clients’ investing and gain an edge over big-name competitors. Similarly, RIAs saw an increase in client satisfaction by leveraging behavioral finance and delivering a more impactful client experience. Firms using behavioral finance reported 3.3X more new assets from existing clients. 

One of the biggest takeaways from this year’s study is that talent remains a top priority for firms, with recruiting staff to increase firm’s skill set/capacity ranking #2 on top strategic initiatives. Looking at the year ahead, 50% of the firms in the study are looking for inorganic growth opportunities, with the majority actively seeking to bring on an advisor with a book of business and others looking to buy another RIA.

With adding talent being one of the top priorities for firms in 2023, advisors looking to make a move should keep their eyes on the RIA space. New opportunities are sure to come up as firms look to continue on a growth path and bolster their roster with skilled advisors that can help elevate the firm.