The registered investment advisor (RIA) industry is poised for robust growth in 2025, driven by three critical factors: organic growth, talent development, and technological innovation, according to Lisa Salvi, Managing Director of Advisor Services at Schwab. Salvi shared insights with WealthManagement, based on Schwab's annual benchmarking report, which examined performance metrics from 1,300 firms managing $2 trillion in assets under management (AUM).
Organic Growth: The Primary Metric
Organic growth stands out as the top metric for RIA success. The study revealed that AUM increased by 17.9 percent at the median in 2023, with client retention remaining strong at 97 percent over the past decade. Organic growth for firms managing $250 million or more was approximately 5 percent, while top-performing firms achieved an impressive 12.2 percent, outpacing their peers in revenue growth over five years. Salvi told WealthManagement about the importance of having a strategic business plan and a documented client persona, noting that firms with those in place gained 67 percent more new client assets in the study.
Talent: A Strategic Priority
Talent acquisition and retention remain paramount. Firms are increasingly focused on creating a strong employee value proposition, which Salvi identified as a critical differentiator. Since 2022, firms that emphasize employee development and align compensation with market trends have reported significant improvements in attracting top talent. Compensation within the RIA industry grew by 17 percent at the median over the past five years, underscoring its competitiveness. Salvi highlighted the need for firms to go beyond pay and benefits, fostering mentorship programs, equity ownership opportunities, and a positive workplace culture.
Leveraging Technology and AI
The "wealthstack" and artificial intelligence (AI) offer significant opportunities for RIAs to optimize operations and enhance client service. Firms are beginning to use AI for tasks such as marketing copy, capturing meeting notes, and integrating with customer relationship management (CRM) systems. Salvi predicts broader adoption of AI in 2025, enabling firms to save time and improve efficiency, particularly in client meeting preparation.
As the RIA industry grows more dynamic, Salvi urges firms to prioritize strategic planning, talent acquisition, and technological innovation to remain competitive. WealthManagement reports that by leveraging those opportunities, RIAs can drive sustainable growth and deliver enhanced value to their clients in 2025 and beyond.
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