Knowledge and Insight
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RIA deals fizzle in the fourth quarter but big-paying banks are getting back into the game
Added on January 2012 in M&A Issues
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Summary: 4thQuarter 2011 M&A deals were down in volume. Schwab Advisor Services reports that there were only 57 M&A deals involving RIAs for the full year 2011 representing approximately $44 billion in total assets. There were 70 deals in 2010 representing $63 billion in AUM. It’s worth noting, however, that the 57 deals were still the second-most ever recorded by Schwab since it started counting them in 2004. The size of the average deal in 2011 was $798 million, the lowest average since 2005 and down from $895 million in 2010.
Schwab encourages RIAs to adopt client segmentation but some don't approve
Added on June 2011 in Thought Leadership
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Summary: Schwab is launching a client segmentation program to aid advisors in analyzing their clients and grouping them to determine which services to offer each client group with the ability to measure profitability.
RIAs and online brokers are winning the market-share game
Added on July 2011 in Thought Leadership
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Summary: The Aite Group's most recent study, New Realities in Wealth Management: From Dust till Dawn, gives the current market share breakdown in wealth managment and the changes that have occured between late 2009 and early 2011.
Marketshare Wealth Management Provider Change
11% RIAs +1.2%
19% On-line Brokerage +3%
38% Wirehouses -1.1%
16% Independent Broker Dealers -4%
The number of commission-only brokers has fallen 40% between late '09 and early '11.
Big Schwab survey: RIAs surpass 2007 former peaks in assets and revenues
Added on July 2011 in Thought Leadership
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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.
More Brokers, Advisors Going Independent and taking Clients with them
Added on April 2011 in Join an RIA
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Summary: The Broker and Advisor Sentiment Index Survey by Fidelity reports that more brokers and financial advisors are looking to make more money and have more control over the type of clients they serve and the investments they recommend and they continued to flood the independent channel at a swift pace in 2010. Culture and community fit are important to them. Brokers and Advisors on average brought over 70% of their client assets when they did make a change.
