Schwab's Director of Business Consulting Shares Marketing Secrets With RIAs

The registered investment advisory market is getting crowded as traditional investment firms eye the model, making it tough for individuals to stand out.

But Charles Schwab’s (SCHW) director of business consulting services, Kimberly Sanders, knows the secret source and it boils down to expanding beyond offering stock buying and selling advice.  

“Over the last 10 years, we’ve seen a migration from the traditional wealth management channels to independence, and RIAs clearly have the winning model. As wirehouse and independent broker/dealers begin to recognize the merits of the RIA model—especially from an investor standpoint—they’re trying to emulate it. Wealth management services, once a differentiator for RIAs, are becoming table stakes for almost all financial services firms,” she said in an interview with WealthManagement.com. “RIAs will need to do more to continue to win in the marketplace.”

Recognizing the shift to be more, 41% of advisors that took part in a Charles Schwab poll in June said they plan to differentiate by offering a broad range of services including tax planning, charitable giving planning and preparing for healthcare costs. All of those services fall outside of traditional portfolio management but are becoming increasingly important to investors. What’s more, the survey showed 44% of registered investment advisors have already started to offer more services without boosting their fees.

Of the survey respondents, 40% said they are spending more time with each client without hitting them up for more fees as well. With technology the cornerstone of investment and financial planning these days, investment advisors are betting it will help them stand out. In fact, more than three-quarters or 76% are betting on technology. “The challenge will be weaving these differentiating services and investments in technology and talent together with the heart and soul of the firm itself,” said Sanders. “This unique collection of benefits will become a sort of tapestry that tells a story that resonates with their staff and their ideal clients.”

Given Schwab has a consulting arm that helps independent advisors, Sanders has a unique window into their pain points. She said the ones that seek out the San Francisco-based discount broker for advice are looking for help with their goals, whether it's developing a strategy or crafting a plan that will build accountability and grow their business.  In the case of marketing, which is becoming increasingly important for RAs as they face increasing competition, Sanders says many need help figuring out why clients would want to work with them rather than the advisor down the street. “Advisors often tell us that they don’t know what makes their firm unique, they just know that they are. We’re hearing more and more from our clients that this is a particular challenge,” she said.

When it comes to the marketing message it is clearly a tale of the haves and have-nots. According to Charles Schwab’s 2017 RIA Benchmarking Study, there is a 5-year net organic growth CAGR​ for the fastest growing firms that is nearly four times rivals. The reason: the growing ones not only kill it on the referral front from their existing clients and influencers but also excel at marketing strategies like networking, community involvement, website presence and in attending and participating in seminars and events. “These firms are employing a broad set of marketing tactics to optimize client acquisition, and bringing in more and larger clients,” she said.