The annual RIA study from the brokerage and wealth management giant pinpoints major challenges for advisors. Organic growth and artificial intelligence helping to overcome capacity constraints, emerged as major talking points.

Perennial problems like organic growth and a shortage of talent jockeyed with new issues such as artificial intelligence and technological capacity constraints as highlights of the 2025 RIA Benchmarking Study from Charles Schwab.

Historically, RIAs have been plagued by low rates of growth when market appreciation is left out of the equation. A recent survey by the Ensemble Practice and BlackRock showed that organic growth for most firms was only around 3 per cent annually.

Organic growth contributed 5 per cent to AuM growth for firms with over $250 million in assets, according to a Schwab survey of nearly 1,300 firms taken in the first quarter of the year. RIAs with less than $250 million in assets reported organic growth of 9.2 per cent, while a cohort of what Schwab calls “top performing firms” based on various performing metrics, said organic growth contributed 12.5 per cent to overall asset growth.

Biggest concern
Organic growth remains “the biggest concern” for RIAs, with strategies like the best way to leverage client referrals generating “huge conversations” among advisors, said Lisa Salvi, Schwab Advisor Services managing director of business consulting and education.

And for good reason: the profit margin on clients gained through organic business development is usually greater than clients acquired through a merger or acquisition.

What’s more, a higher rate of organic growth translates into a higher valuation. “Organic growth becomes a real differentiator over time,” according to a Mercer Capital report on RIA valuations. “If market growth is the tide that lifts (or lowers) all boats, organic growth is the engine on the boat.”

Salvi cited referrals, a firm’s website and community involvement as the keys to organic growth. For AlphaCore Wealth Advisory, one of Schwab’s high performing firms, documenting an ideal client persona, a client value proposition and a digital and traditional marketing plan constitute its organic growth “trifecta,” said Dick Pfister, the firm’s founder and chief executive.

Pfister cited what the firm calls “Core Connections” soirees as a particularly effective organic lead generator. Clients invite friends and neighbors to a cocktail party hosted by AlphaCore. Advisors mingle but the vibe is low key and casual, according to Pfister. Though hardly a groundbreaking tactic, Pfister said the lead conversions are “awesome.”

Talent top priority
Attracting and retaining talent is also a top priority “to position firms for success and ensure their long-term sustainability,” according to the report.

Based on current growth rates and the number of RIAs, the industry will need to hire more than 70,000 new staff over the next five years, without accounting for any attrition, retirements or new firms, according to the study.

More than three-quarters of surveyed firms reported hiring last year and roughly the same number plan to add staff this year.

Answering the phone with AI
As expected, artificial intelligence proved to be increasingly widespread over the past year. More than two-thirds of surveyed RIAs reported using AI in some way, mostly for administrative support, particularly note taking, creating meetings and drafting emails. Other AI uses included generating marketing content, developing client correspondence, conducting research and developing client education.

Using artificial intelligence as a phone receptionist has been the “most impactful” use of AI for United Financial Planning Group, said Michael Barrasso, director of business development for  the RIA.

Although the firm’s lead sources were growing, Barrasso noticed that the number of phone meetings were going down. United switched from using a large call answering service to a phone tree system, but nearly half of all incoming calls still went missing. “Those are high value prospects, retirees or Baby Boomers with real assets,” he said, estimating the capacity constraint was costing the firm hundreds of thousands of dollars in lost revenue.

Consequently, Barrasso programmed an AI receptionist that can check an advisor’s calendar, book prospects with the appropriate advisor, put in calendar and Zoom links, reminders and filter out spam calls. The result, he said, has been approximately $20 million in United’s pipeline in one month, notable because the firm’s annual phone pipeline has been $70 million.

United has spun off the program as a separate company, WealthLine.AI, joining a number of other AI receptionists including MyAIFrontDesk, RingCentral, Smith.AI and JustCall. 

Overall, median assets under management for RIAs industrywide rose 16.6 per cent in 2024, while revenue was up by 17.6 per cent. “It was a very strong year,” Salvi said.