Advisor Services
Schwab RIA
Compensation
Report
An addendum to Schwab’s 2020
RIA Benchmarking Study
Media Contact:
Meredith Richard
Charles Schwab Public Relations
646.343.7419
Meredith.Richard@schwab.com
Advisor Services
1
Schwab’s RIA Compensation Report reflects responses
from Schwab’s 2020 RIA Benchmarking Study, the largest
study of its kind, and offers a comprehensive look at
compensation practices in the independent financial advice
industry in 2019.
The compensation findings enable firms to evaluate
how their approach to employee compensation, incentives,
benefits, and firm ownership compares with that of
their peers.
Key report highlights:
2019 compensation costs are 74% of a firm’s expenses.
The competition for talent is growing: 75% of firms
hired staff in 2019, and 39% of firms recruited
employees from other RIAs.
1
Median total cash compensation across all
roles increased 4% from 2018 to 2019.
Over three-quarters (77%) of firms compensated
staff with performance-based incentive pay in 2019.
Firms are increasingly adding client team and
specialized roles to support strategic firm growth
and deliver exceptional client experiences.
Schwab’s RIA Benchmarking
Study is the leading study
in the industry—761 firms
participated in the compensation
portion of the study in 2020,
representing three-quarters of
those who participated in the
overall study (1,010 firms). Data
was collected on nearly 10,000
employees across 27 roles.
2020 RIA Benchmarking Study from Charles Schwab
1
Introduction
1
The 2020 Benchmarking Study from Charles Schwab was fielded from January to early April 2020. The study contains self-reported data from 1,010 RIA firms. Hiring data represents firms with $250 million
or more in AUM.
Key Compensation Findings
2
Client Account Management, Sales, and Marketing
Base salaries for client account management, sales, and marketing roles ranged from
$60,000–$150,000 at the median.
Total cash compensation ranged from $64,000–$204,000 at the median. Total cash
compensation, including owner profit distributions, ranged from $64,000–$240,000 at
the median.
The majority of client account management, sales, and marketing roles receive performance-
based incentive pay.
Nearly a quarter (24%) of Senior Client Account Mangers / Relationship Managers have
compensation tied to revenue and 49% have some degree of firm ownership‒more than any
other non-executive management role.
Talented employees help drive
firm growth, especially in a volatile
environment. That’s why having a
high-performing team, unlocking
their potential and rewarding and
developing the next generation of
leadership is vital to RIA firm
success.
Schwab’s 2020 RIA Benchmarking
Study supports firms in developing
successful compensation strategies
to attract, motivate, and retain
key staff.
Investments
Base salaries for investments roles ranged from $60,000–$125,000 at the median.
Total cash compensation ranged from $65,000–$160,000 at the median. Total cash compensation, including owner profit distributions,
ranged from $65,000–$170,000.
More than 55% of all investments roles receive performance-based pay. 80% of Paraplanners collect performance-based incentive
pay, followed by 78% of Portfolio Administrators, 76% of Traders, 73% of Research Analysts, 72% of Financial Planners, and 55% of
Investment/Portfolio Managers.
Nearly one-third (31%) of Investment/Portfolio managers and 13% of Financial Planners have some degree of firm ownership. Over a
quarter (26%) of Financial Planners have 50% or more ownership in their firms, while 17% of Investment/Portfolio Managers have 50%
or more ownership.
Operations and Administration
Base salaries for operations and administration roles ranged from $45,000–$97,000 at the median.
Total cash compensation ranged from $48,000–$111,000 at the median. Total cash compensation, including owner profit distributions,
ranged from $48,000–$113,000.
More than eight in ten (83%) Human Resource Professionals receive performance-based incentive pay, followed by Technology
Professionals (80%), Internal Accountants / Bookkeepers (79%), and Operations Directors/Managers and Executive Assistants (76%).
While operations and administrations staff are less likely to receive firm equity, 15% of Operations Directors/Managers hold some
firm ownership.
1
More information on specific roles can be found in the Definitions section of the report.
2020 RIA Benchmarking Study from Charles Schwab
3
2020 RIA Benchmarking Study from Charles Schwab
2020 RIA Benchmarking Study from Charles Schwab
4
5
Nearly four in ten firms recruit from other RIA firms, emphasizing
the need for a compelling compensation strategy and employee
value proposition.
2020 RIA Benchmarking Study from Charles Schwab
Median results for all firms with $250 million or more in AUM. Past performance is not an indicator of future results. 2020 RIA Benchmarking Study from Charles Schwab, fielded January to early April
2020. Study contains self-reported data from 1,010 firms.
Recruitment channels in 2019
RIAs
Colleges and universities
Bank or trust
Wirehouse
IBD
16%
12%
10%
33%
39%
Median firm hired
2 new staff
in 2019
Firms that hired in 2019
Firms that planned to hire in 2020
73%
75%
Talent & Staffing
6
Planning for increased staff and more complex organizational
structures is critical as firms grow.
2020 RIA Benchmarking Study from Charles Schwab
Results for firms by AUM peer group. Compensation costs include salaries, bonuses, benefits, payroll taxes, and profit distributions. Past performance is not an indicator of future results. 2020 RIA
Benchmarking Study from Charles Schwab, fielded January to early April 2020. Study contains self-reported data from 1,010 firms.
3
5
7
12
21
55
$1B–$2.5B$500M–$1B$250M–$500M Over $2.5B$100M–$250M
2019 compensation
costs are
74%
of a firm’s expenses
Total staff by AUM (median)
Up to $100M
Talent & Staffing
Across the RIA industry, total compensation ticked up year
over year.
7
2020 RIA Benchmarking Study from Charles Schwab
1
Median percent change for the 27 roles in the compensation portion of the RIA Benchmarking Study from Charles Schwab. Total cash compensation includes owner profit distributions.
Past performance is not an indicator of future results. 2020 RIA Benchmarking Study from Charles Schwab, fielded January to early April 2020. Study contains self-reported data from 1,010 firms for
the main study and 761 firms for the compensation portion.
Change in median total
cash compensation across all
roles
1
from 2018 to 2019
+4%
Compensation
Client team and specialized roles have seen a long-term
increase in compensation, some more than others.
8
2020 RIA Benchmarking Study from Charles Schwab
Past performance is not an indicator of future results. 2020 RIA Benchmarking Study from Charles Schwab, fielded January to early April 2020. Study contains self-reported data from 1,010 firms for
the main study and 761 firms for the compensation portion.
Total cash compensation including owner profit distributions
Median, $ in thousands
2015
2019
$155
$113
$72
$65
$95
$64
$105
$240
$140
$95
$60
$60
$87
$57
$97
$202
Senior Client Account/
Relationship Manager
Client Account/
Relationship Manager
Client Services
Associate
Financial Planner
Paraplanner
Portfolio Administrator
Operations Director/
Manager
Chief Compliance
Officer
19%
8%
13%
9%
8%
20%
18%
11%
Compensation
9
81%
Base salary as a percent of total cash
compensation
1
in 2019 across all roles
Compensation
Attractive compensation packages include more than base
salary, particularly for revenue-generating roles.
2020 RIA Benchmarking Study from Charles Schwab
1
Total cash compensation includes base salary, performance-based incentive pay, compensation tied to revenue generation, and owner profit distributions.
2
Role types exclude Executive Management roles.
Past performance is not an indicator of future results. 2020 RIA Benchmarking Study from Charles Schwab, fielded January to early April 2020. Study contains self-reported data from 1,010 firms for
the main study and 761 firms for the compensation portion.
Revenue roles
70%
Non-Revenue roles
90%
Base salary as a percent of total cash
compensation
1
in 2019 by role type
2
10
Motivating staff with incentive compensation can impact the
quality of talent, engage employees, and advance the firm’s goals.
2020 RIA Benchmarking Study from Charles Schwab
1
Performance-based incentive pay includes discretionary bonus and compensation resulting from firm goals, department or team goals, and business development results.
2
Median result for firms that compensated staff with performance-based incentive pay in 2019.
Past performance is not an indicator of future results. 2020 RIA Benchmarking Study from Charles Schwab, fielded January to early April 2020. Study contains self-reported data from 1,010 firms for
the main study and 761 firms for the compensation portion.
77% of firms
compensated staff
with performance-
based incentive pay
in 2019.
1
3 of 4 reported
roles received
performance-based
incentive pay
in 2019.
2
Compensation
Compensation tied to revenue generation from new and existing
clients can help ensure staff are aligned with the firm’s growth
objectives.
11
2020 RIA Benchmarking Study from Charles Schwab
Percent of reported roles that tie compensation to revenue generation includes only those firms that tie compensation to revenue generation. Past performance is not an indicator of future results. 2020
RIA Benchmarking Study from Charles Schwab, fielded January to early April 2020. Study contains self-reported data from 1,010 firms for the main study and 761 firms for the compensation portion.
At the median firm,
1 in 4 roles
tied compensation
to revenue generation
in 2019.
Across the study,
28% of firms tied
compensation to
revenue generation
in 2019.
Compensation
33%
29%
22% 22%
33%
33%
27%
22%
2019
2015
Equity ownership is an important part of compensation, as it
helps to retain talent and support firms’ succession strategies.
Over $1B$500M–$1B$250M–$500M$100M–$250M
Working owners
1
as a percent of total staff
12
1
Working owners are staff that hold equity in the firm.
Results from the 2016 and 2020 RIA Benchmarking Study from Charles Schwab. 2020 RIA Benchmarking Study from Charles Schwab, fielded January to early April 2020. Study contains self-reported
data from 1,010 firms for the main study and 761 firms for the compensation portion.
2020 RIA Benchmarking Study from Charles Schwab
Equity Ownership
40%
84%
87%
97%
99%
11%
45%
61%
75%
85%
10%
38%
45%
58%
72%
14%
29%
38%
61%
81%
Dental insurance
Health insurance
Health benefits are a key element of a competitive
compensation package.
Over $1B$500M–$1B$250M–$500M$100M–$250M
Percent of firms providing benefit
13
Results for firms by AUM peer group. Past performance is not an indicator of future results. 2020 RIA Benchmarking Study from Charles Schwab, fielded January to early April 2020. Study contains self-
reported data from 1,010 firms for the main study and 761 firms for the compensation portion.
2020 RIA Benchmarking Study from Charles Schwab
Vision insurance
Life insurance
Up to $100M
Benefits
Model
Definition Age of firm
2019 AUM
2019 total
staff
Solo
Firm with one advisor, possibly with administrative
support.
9 $94 2
Silo
Firm with two or more advisors–advisors retain their own
clients, are compensated on their own book of business,
and share overhead costs.
12 $268 5
Ensemble
Firm with multiple advisors–clients belong to the firm
and are served by a team from a relationship-
management perspective.
Fully centralized ensemble: Ensemble + operational
processes are standardized, and staff operate as a
functional team.
21 $482 9
Enterprise
Large firm with multiple locations and advisors–clients
belong to the firm. Well-defined functional
teams/departments and multiple layers of leadership.
Fully centralized enterprise: Enterprise + operations are
standardized across all locations or processed in a
single location.
23 $2,271 37
An effective organizational structure can enable strategic growth
by establishing the foundation for roles and responsibilities.
14
2020 RIA Benchmarking Study from Charles Schwab
Median results by organizational structure for those firms completing the compensation portion of the RIA Benchmarking Study from Charles Schwab. Past performance is not an indicator of future
results. 2020 RIA Benchmarking Study from Charles Schwab, fielded January to early April 2020. Study contains self-reported data from 1,010 firms for the main study and 761 firms for the
compensation portion.
Organizational Structure
15
Up to $100M $100M-$250M $250M-$500M $500M-$1B Over $1B
Firms most often identify with the ensemble model, where
clients belong to the firm and are served by a team.
Silo
Ensemble
Solo
Fully centralized ensemble
Enterprise
Fully centralized enterprise
2020 RIA Benchmarking Study from Charles Schwab
Past performance is not an indicator of future results. 2020 RIA Benchmarking Study from Charles Schwab, fielded January to early April 2020. Study contains self-reported data from 1,010 firms for
the main study and 761 firms for the compensation portion.
Organizational Structure
0%
50%
100%
As organizational structures become more complex, client team
and specialized roles are more prevalent.
16
2020 RIA Benchmarking Study from Charles Schwab
Results by organizational structure for those firms completing the compensation section of the RIA Benchmarking Study from Charles Schwab. Past performance is not an indicator of future results.
2020 RIA Benchmarking Study from Charles Schwab, fielded January to early April 2020. Study contains self-reported data from 1,010 firms for the main study and 761 firms for the compensation portion.
Organizational Structure
Solo Silo Ensemble Enterprise
Senior Client Account/Relationship Manager
14% 34% 60% 86%
Client Account/Relationship Manager
12% 34% 51% 81%
Client Services Associate
12% 34% 56% 84%
Financial Planner
6% 15% 31% 42%
Paraplanner
4% 7% 20% 39%
Portfolio Administrator
5% 10% 21% 47%
Operations Director/Manager
28% 31% 40% 66%
Chief Compliance Officer
3% 22% 23% 72%
Percent of firms with role
Over the years, demand for these roles has increased as RIAs
have grown.
17
2020 RIA Benchmarking Study from Charles Schwab
Past performance is not an indicator of future results. 2020 RIA Benchmarking Study from Charles Schwab, fielded January to early April 2020. Study contains self-reported data from 1,010 firms for
the main study and 761 firms for the compensation portion.
Increase in percent of firms with role from 2015 to 2019
Senior Client Account/
Relationship Manager
Client Account/
Relationship Manager
Client Services
Associate
Financial Planner
Paraplanner
Portfolio Administrator
Operations Director/
Manager
Chief Compliance
Officer
30%
24%
17%
12%
28%
3%
13%
33%
Organizational Structure
Providing career paths supports staff development, improves
engagement, and builds bench strength.
18
2020 RIA Benchmarking Study from Charles Schwab
Firms with staff in at least 2 of the 3 roles:
Client Service Associate
Client Account Manager/Relationship
Manager
Senior Client Account
Manager/Relationship Manager
Firms with staff in at least 2 of the 3 client service roles (Client Service Associate, Client Account Manager/Relationship Manager, Senior Client Account Manager/Relationship Manager) listed in the
Compensation section of the RIA Benchmarking Study from Charles Schwab.
Past performance is not an indicator of future results. 2020 RIA Benchmarking Study from Charles Schwab, fielded January to early April 2020. Study contains self-reported data from 1,010 firms for
the main study and 761 firms for the compensation portion.
Client Service
Career Path
Firms under $250M
42%
Firms $250M–$1B
69%
Firms $1B+
82%
Organizational Structure
While an operations career path is not as prevalent as a client
service career path, it is critical as firms become more complex.
19
2020 RIA Benchmarking Study from Charles Schwab
Firms with staff in at least 2 of the 3 roles:
Operations Associate
Operating Director/Manager
Chief Operating Officer
Firms with staff in at least 2 of the 3 client service roles (Operations Associate, Operations Director/Manager, Chief Operating Officer) listed in the Compensation section of the RIA Benchmarking Study
from Charles Schwab.
Past performance is not an indicator of future results. 2020 RIA Benchmarking Study from Charles Schwab, fielded January to early April 2020. Study contains self-reported data from 1,010 firms for
the main study and 761 firms for the compensation portion.
38%
64%
Organizational Structure
Operations
Career Path
Firms
$250M–$1B
38%
Firms
$1B+
64%
Firms under $250M
13%
Firms $250M–$1B
38%
Firms $1B+
64%
Advisor Services
National
Compensation
Results
2020 RIA Benchmarking Study from Charles Schwab
15
2020 RIA Benchmarking Study from Charles Schwab
1
Other performance-based incentive pay includes compensation resulting from firm goals, department or team goals, and business development results.
22
2020 RIA Benchmarking Study from Charles Schwab
1
Other performance-based incentive pay includes compensation resulting from firm goals, department or team goals, and business development results.
23
2020 RIA Benchmarking Study from Charles Schwab
1
Other performance-based incentive pay includes compensation resulting from firm goals, department or team goals, and business development results.
Advisor Services
Definitions
2020 RIA Benchmarking Study from Charles Schwab
19
Definitions
2020 RIA Benchmarking Study from Charles Schwab
Client Account Management, Sales, and Marketing
Director of Client Service:
Manages the client service activities for the entire firm or a specific business area.
Coordinates client service activities with those of sales and marketing staff.
Supervises client service staff.
Tracks and reports results of key service measures against firm objectives.
Leads resolution of problems related to client service.
May manage relationships with key clients and prospects.
Senior Client Account Manager/Relationship Manager:
Fills the most experienced advisory position within the firm.
Serves as primary manager of existing client relationships, particularly more complex relationships.
Formulates and implements advice but may rely on technical specialists to develop recommendations within their area of expertise.
Often works with, trains, and supervises other staff in client service delivery.
Client Account Manager/Relationship Manager:
Manages existing client relationships, working either with a principal or more experienced advisor or on their own.
Provides client service management (often to small and midsize accounts).
Assists senior professionals in conducting client meetings.
Resolves basic and routine client account issues.
Client Services Associate:
Provides non-advice-related support to clients, including:
Preparing standard client reports
Maintaining contact with clients to provide or obtain updated information
Scheduling client meetings
Responding to administrative client queries
Business Development Professional:
Develops new business, with relatively little responsibility (less than 10% of time) for managing relationships, providing advice, or serving clients.
Marketing Professional:
Implements marketing plans and programs, assists in developing new marketing and advertising campaigns, and develops strategic communications
deliverables.
26
2020 RIA Benchmarking Study from Charles Schwab
Investments
Investment/Portfolio Manager:
Actively manages a client portfolio using individual securities or a combination of securities and third-party managers.
May participate in or lead development of an investment strategy. (Note that this position describes an active-style internal manager.)
Financial Planner:
Provides financial planning to the clients of the lead and service advisors.
Serves as in-house expert on financial planning issues.
Does not act as primary relationship manager.
Research Analyst:
Performs research and analysis and/or manages investment options.
Provides information and makes recommendations to professional staff on managers, advisory service products, investment selection, suitability
guidelines, and reporting.
Paraplanner:
Provides technical support to the Client Account Manager/Relationship Manager roles in the delivery of advice to clients.
Responsibilities include data gathering, modeling, case design, plan development, presentation development, etc.
May participate in client meetings, but not in an advice capacity.
Has no decision-making authority on client matters.
Portfolio Administrator:
Sets up and maintains client accounts.
Compiles and completes client, custodian, and firm paperwork.
Reviews and maintains client transactions and activity.
Executes client and firm tasks, such as asset transfers, preparation of reports, and general support of portfolio and investment strategies.
Trader:
Buys and sells securities as directed by the portfolio managers, advisors, or CIO.
Definitions
27
2020 RIA Benchmarking Study from Charles Schwab
Operations and Administration
Operations Director/Manager:
Manages daily activities within the operations department (e.g., trading and reporting) and serves as an intermediary between the department and
executive management.
Typically supervises operations staff, and may be responsible for establishing or contributing ideas for department processes, procedures, and protocols.
Operations Associate:
Performs daily activities within the operations department.
May provide network administration/IT support to staff.
Compliance Associate:
Assists in implementing the firm’s compliance program, under the direction of the designated Chief Compliance Officer.
Office Manager/Administrator:
Responsible for general office operations, such as internal accounting, office equipment and supplies, benefits administration, and payroll coordination.
May also coordinate firm website or other marketing tools. (Note: This can be a catchall role in firms that do not employ multiple staff members for each
of these functions.)
Internal Accountant/Bookkeeper:
Performs internal accounting, and generates the firm’s financial statements.
Human Resources Professional:
Handles employee relations, payroll and benefits, and training. May direct and coordinate administrative functions of an organization.
Technology Professional:
Generally provides service related to software, hardware, databases, Web resources, network, and enterprise systems. Duties can include network
management, software development, and database administration.
Executive Assistant:
Handles a variety of administrative functions to aid a dedicated manager of the firm.
May perform secretarial and clerical duties as needed by the dedicated manager.
Receptionist:
Greets and directs clients and other visitors.
Screens and routes telephone calls.
May perform incidental typing or other routine clerical duties.
Definitions
Advisor Services
Methodology
& Disclosures
2020 RIA Benchmarking Study from Charles Schwab
Schwab designed the RIA Benchmarking Study to capture insights in the RIA industry based on study responses from individual firms. The 2020 study provides
information on such topics as asset and revenue growth, sources of new clients, products and pricing, staffing, compensation, client experience, technology, and
financial performance. Fielded from January to early April 2020, the study contains self-reported data from 1,010 firms that custody their assets with Schwab
Advisor Services
TM
and represent $1.1 trillion in AUM, making this the leading study in the RIA industry. This self-reported information was not independently
verified. Since the inception of the study in 2006, more than 3,700 firms have participated, with many repeat participants. Participant firms represent various sizes
and business models. They are categorized into 12 peer groups—7 wealth manager groups and 5 money manager groups—by AUM size. Unless otherwise noted,
study results are for all firms with $250 million or more in AUM, representing the vast majority of total assets managed by this year’s participants.
Compensation data represents all firms that participated in the compensation portion of the 2020 RIA Benchmarking Study from Charles Schwab and contains
self-reported data from 761 firms on nearly 10,000 total employee responses. The self-reported information provided by individual advisory firms was not
independently verified.
Base salary represents a 40-hour work week. Where study responses specify work of less than 40 hours, base salary has been grossed up to reflect the
equivalent salary of a 40-hour work week.
Any responses with total cash compensation (including owner profit distributions) below $20,000 are not included in the calculations.
Throughout the report, median values are provided, unless otherwise noted, to provide the best indicator of a “typical” firm.
This report was produced by Charles Schwab & Co., Inc., and is intended for independent investment advisory firms. The report is intended for general
informational purposes only, and is not intended to provide financial, investment, regulatory, compliance, legal, or tax advice. Any guidance taken from the report
is not tailored to the particular circumstances of any reader of the report or their firm. The report relies, in part, on information provided to Schwab by the advisory
firms named and others that participated in Schwab’s research and interviews. Schwab did not independently verify that information, and Schwab makes no
representations about the accuracy of the information in the report. In addition, the experience and practices discussed in the report may not be representative of
other firms or the experience or results you might obtain.
This report is not intended for use by investors in evaluating or selecting an investment advisor or otherwise. This report is not a recommendation or endorsement
of, referral to, or solicitation on behalf of any investment advisor, whether or not named, quoted, or described in the report. Investment advisory firms are
independent of and not affiliated with Schwab, and their employees and agents, including individuals named in the report, are not employees, agents, or
representatives of Schwab.
Schwab Advisor Services™ serves independent investment advisors and includes the custody, trading, and support services of Schwab. Independent investment
advisors are not owned by, affiliated with, or supervised by Schwab.
©2021 Charles Schwab & Co., Inc. (Schwab). All rights reserved. Member SIPC (www.sipc.org).
0221-1H6M
23
2020 RIA Benchmarking Study from Charles Schwab
Methodology and disclosures
