25 years of IMPACT

Registered investment advisers have made enormous strides in the quarter century since the first Schwab IMPACT conference and face exciting new opportunities and challenges in the years ahead, Bernie Clark told attendees at the opening general session of the 2015 event.

“I am honored to partner with you. What you do matters,” said Mr. Clark, executive vice president of Schwab Advisor Services, whose Nov. 10-13 conference in Boston attracted more than 1,800 advisers and record-keepers. “You rise to the occasion every time, making things better for your clients.”

He noted that Schwab acts as custodian for about $1 trillion in assets managed by RIAs, representing almost half of Schwab’s total assets. Today, RIAs have more than $4 trillion in assets under management, as compared with $1.6 trillion a decade ago. Mr. Clark said that RIAs have been very successful at spreading the message that investors are better served by independent advisers, who work only for the investor.

More than 40% of Schwab-affiliated RIAs said they have doubled their AUM in the last five years, and the average firm profitability is up nearly 40%, according to Jon Beatty, senior vice president, national sales and relationship management for Schwab Advisor Services, who spoke at a pre-conference session.

But that is just the tip of the iceberg, Mr. Clark said. There is about $23 trillion in investable assets held by affluent households outside the RIA space, which represents an enormous opportunity for RIAs and their partners, such as Schwab.

There are also challenges, Mr. Clark said, including cyber-security concerns, the need for firms to find new talent, and the demand for advocacy both inside and outside Washington.

Another challenge is reaching out to Millennials and the generations after them. “There’s a huge opportunity in front of us,” Mr. Clark said. “What you’ve done has been so inspiring — but it’s time to create again.”
Younger investors are different in the way they interact and in the things they want out of life, he said, adding, “It will be like running multiple businesses in your firms.” But ultimately, the challenge is mainly one of using different tools and approaches; relationships always will be at the forefront of the advisory business, he said.

Mr. Clark promised that Schwab will continue to work with RIAs to develop the tools they will need to grow their firms by serving new generations of clients with the same commitment and independence with which they have served clients for decades.

“We will serve you in every way in this noble mission — because you are the best,” he said.

This article originally appeared as a special section in the December 14, 2015 issue of InvestmentNews.