Summary: Schwab Advisor Services and the RIA channel have surpassed revenues and asset levels where they were pre-2008 meltdown and the stage is set for a new era of growth, according to the 2011 RIA Benchmarking Study from Schwab. Median standardized operating income recovered to 18.3% up from 14.9% in 2009. This, combined with strong revenue gains, produced a surge in profits of 45% at the average firm since 2009. Schwab’s Bernie Clark believes that RIAs are poised for growth after the challenges of the past few years. Palaveev feels that advisors now need to raise prices on their services which they expanded during the financial crisis.
 Eighteen percent (operating margins) is less than is what is considered ideal, which is closer to 25%, and 4% growth is really disappointing.”Philip Palaveev, Seattle-based president of Fusion Advisor Network |
It is important to make note of Schwab’s Benchmarking study and compare the study’s numbers to your own practice’s performance. Take note of Palaveev's cautionary view in the quote.
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