The survey of 629 RIAs representing $229 billion in assets under management shows that 57 per cent of advisors consider creating a more diverse workforce as a strategic priority, while nearly half are expanding their networks to identify such as candidates. This is not the first time such an issue has been flagged in recent weeks; according to a recent NEPC poll, endowments and foundations rank investment committee diversity as a top issue related to governance.

Meanwhile, nearly a third of those polled by Schwab said they offer equity ownership opportunities to their staff and nearly half have a documented path to ownership. Those that offer ownership do so to ensure the long-term success of their firm and to retain top talent , it emerged. Equity ownership opportunities are increasingly more likely as a firm’s AuM grows; players with over $100 million are 2.5 times as likely as those with under $100 million to offer equity ownership, Schwab said.

Across firms of all sizes, adding staff in operational and support roles came out as the top talent acquisition priority. For larger firms, this is followed by bringing on junior advisors , whereas for smaller firms there is an equal level of focus on hiring individual “tenured” advisors .

Advisors have reported client retention rates of 97 per cent in past studies, Schwab noted, and the firm's latest findings show that RIAs are experiencing high employee retention rates too – specifically in the areas of business development and investment professional roles . Over half of all firms are currently hiring, according to the findings, with larger firms reporting that they are taking a more aggressive approach than smaller firms .

Differentiation

Meanwhile, the study – reinforcing previous industry research – also found that differentiating firm services may be an opportunity for advisors. While a majority believe they offer “holistic” wealth management , Schwab said its findings indicate a range of views regarding the definition of holistic wealth management. For most, however, investment management , tax-efficient planning and long-term financial planning typically make up a firm’s core offering. “Services such as financial planning for children, estate planning, charitable planning, and health care planning are more likely to be considered value-added services by advisors,” Schwab said.

On the topic of technology and with an eye towards automation in the workplace, nearly half of firms said they would most likely use automated investment management to target younger investors or those with under $100,000 in investable assets . Respondents said the benefits of using an automated investment management solution includes being able to serve clients with lower minimums and therefore also being able to reduce the cost to serve certain clients .

Overall, RIAs reported that the bull market of the past six years has contributed positively to growth across areas including attracting new clients , providing higher advisor compensation , creating more capital to invest in firm growth and operations , and driving the consolidation of client assets . Over half of say the industry has not fully matured.

“The independent model is resonating with both investors and with advisors, and this is driving the dramatic growth we have witnessed to date and expect to continue in the decade ahead,” said Bernie Clark, executive vice president and head of Schwab Advisor Services. “It’s clear that the environment in which we operate is changing. From emerging clients and the next generation of advisors, to new technologies that change the way firms work, RIAs have the opportunity to capture an increased share of the affluent market and to take decisive actions now to lay the groundwork for their firm well into the future.”