Digital client acquisition fuels growth at top RIAs: Schwab

Registered investment advisers that pivoted toward digital-focused client acquisition strategies over the last year experienced greater organic growth compared with their peers, with more than 70% of firms generating leads from their websites, virtual prospecting events and online advertising, according to Charles Schwab’s 2021 RIA Benchmarking study.

As a result of the increased use of digital business development, 68% of all advisers met or exceeded their client growth goals. Top-performing firms  — those that rank in the top 20% of Schwab’s firm performance index — did even better, with 81% exceeding or meeting their new client goals.

This year’s study, fielded during the first quarter to 1,340 advisory firms, including TD Ameritrade advisers, centered around new client growth and the tactics that firms used to propel client acquisition during the pandemic, according to the announcement. 

Top-performing RIAs cited their website (82%), email campaigns (71%) and social media (61%) as the top three channels for attracting clients. 

With websites serving as the new “front door” during the pandemic, firms optimized them to attract and engage prospects, the study noted. Top-performing RIAs employed search engine optimization (52%), content designed for their ideal client persona (51%) and website metrics (51%). 

Advisers' embrace of the digital landscape is proof that the pandemic was a catalyst for growth and created an atmosphere of innovation that helped advisers reimagine how they engage with clients, prospects and staff, said Lisa Salvi, managing director of business consulting and education at Schwab Advisor Services. 

As for marketing, firms that had written marketing plans, ideal client personas and client value propositions attracted 50% more new clients and 62% more new client assets. In fact, top-performing firms are more likely to have a documented marketing plan and spend more — as a percent of revenue — to execute their plans. Top RIAs spend about 2.1% of their revenue on marketing plans, versus 1.6% their peers allocate to marketing. 

Technologies that helped RIAs with portfolio management, client relationship management and financial planning were ranked as the three tech tools that provided the greatest return of investment among all advisers surveyed. 

Looking ahead, advisers anticipate leveraging both virtual and in-person business development strategies. During the first quarter, 90% of advisers said that they engaged with prospects virtually, and that percentage dropped to 30% when pandemic-related restrictions were lifted. 

The return to more in-person meetings this year might be what depressed advisers’ prioritization of new technology to improve productivity. Technology ranked No. 6 in advisers' top 10 strategic initiatives, which was down from its No. 3 ranking in the previous Schwab study in 2020.