Independent advisors are pushing deeper into artificial intelligence, alternative investments and private markets, but the fiduciary duty that defines registered investment advisors still anchors how they run their firms, according to the latest independent advisor outlook study from Schwab Advisor Services.
Drawing from a poll of more than 1,2000 advisors custodying assets with Schwab, the study found nearly two-thirds of respondents (64%) see being a fiduciary – a legal obligation to put clients' interests first – as one of the best parts of running an RIA firm. That far outstrips the next most popular answer, access to solutions that best serve clients, which drew 37%.
Advisors tie that duty to concrete benefits. Ninety percent said it was very helpful in keeping clients’ best interests in mind, 86% said it kept them from forcing unwanted products on clients and 79% said it helped establish and maintain trust.
“The fiduciary standard is a differentiator because clients feel it. When someone knows you are putting their interests first, it changes the relationship. That’s the foundation independent advisors have been building on for decades,” said Jon Beatty, head of Schwab Advisor Services, in the report.
Some 53% in Schwab's survey said what it takes to succeed hasn’t changed since they entered the business, while just 17% named access to scalable, sophisticated technology as the biggest shift over the years.
Assets under management remain the primary growth gauge for 75% of firms in Schwab's outlook study, though many also track client counts (53%), referrals (44%) and AUM per household (40%).
Over the next three years, 70% of advisors expect growth to be fueled by referrals, even though at least part of that stream has been getting harder to access. Another 60% point to exceptional service. To support that, 49% are investing in AI tools for their workflows, 40% in sales and marketing and 32% in tech-stack upgrades.
Product shelves are also widening. Half of firms in Schwab's survey research offer pledged asset lines – loans backed by a client’s portfolio – while 45% offer alternative investments, most commonly real estate and private equity. Some 37% provide private market investments today and another 13% plan to within three years, a shift that has seen custodians expand private markets access for independent advisors.
Advisors expect the biggest AI payoff from less time spent on administrative tasks (cited by 67%), ahead of improved scalability (38%) and better client communications (34%). Within three years, 81% expect AI to handle at least part of their research and analysis.
That doesn't mean advisors are willing to totally unleash AI just yet, Schwab found, as autonomous tools remain rare. Only 7% of advisors said they use agentic AI – systems that make decisions and act independently within workflows – which the RIA custodian firm said is a sign that the technology is still in early stages.
Of advisors who expect AI to affect their firms, 66% plan to keep it behind the scenes so the client experience stays personal. On the hiring side, 33% of firms said they're now placing more weight on relationship and emotional intelligence, while 30% are looking for judgment and critical thinking. Just around a quarter of advisors (26%) said they want candidates who are comfortable and fluent with AI tools.
“AI is changing how work gets done inside advisory firms. What it can’t change is why clients choose an advisor: trust, judgment, and a person who knows their story,” said Alison Dooher, head of AI at Schwab Advisor Services.
AI regulation and guidance ranked first among areas where advisors want more industry advocacy, at 38%, ahead of a universal fiduciary standard (32%) and regulations around cybersecurity and data privacy (28%).
On AI rules, 68% favor standards that are clear and easy to understand, while only 4% want all-encompassing mandates.
“Putting clients first has always been the point of the fiduciary model. New technology doesn’t change that. Advisors have been clear about what they need: guidance practical enough to use and we will keep making sure regulators hear that,” Beatty said in the report.
At IMPACT, CEO Rick Wurster said Schwab Wealth Advisory serves only existing retail clients, and he pledged support for sub-$100M RIAs as Fidelity drops them.
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InvestmentNews traveled to Boston, Massachusetts, to cover Schwab's annual conference. All coverage can be found here.
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