Schwab’s advice business grew 55% last quarter.
Schwab Wealth Advisory, the company’s in-house advice business, takes clients starting at $500,000. CEO Rick Wurster says 31% of Schwab’s retail households would pay for advice, but only 5% do, so Schwab is hiring consultants and opening in 10 new markets this year to close the gap.
Schwab will outspend you 4,200 to 1.
Schwab put about $420 million into advertising last year; most $1 billion RIAs spend barely $100,000. The marketing won’t be great. It doesn’t have to be, because it will be everywhere. Schwab will sponsor your kid’s soccer league and your town’s summer concerts in the park. It will sponsor your dad. Your dad will be sponsored by Schwab.
Being everywhere wins when everyone sounds the same, and most RIAs already sound like Schwab. Of 30 Denver-area RIA homepages we checked, 16 lead with some mix of “wealth management,” “fiduciary,” “personalized,” and “goals.” If your marketing would still make sense with Schwab’s logo on it, Schwab owns your market.
Referrals and a rising market hid the problem.
Sounding the same used to cost almost nothing. Referrals, cheap acquisition money, and a rising market lifted AUM even when new-client growth was thin; median net new assets grew about 2.2% a year in the five years ending 2021. Few firms ever had to learn whether their marketing could win a client on its own. Buyers have learned the difference, though. They now pay 1.0 to 1.5 times more EBITDA for firms growing organically above 10% than for firms below 3%.
Your marketing has two paths forward: founder-led content or surgical funnels.
The first path is founder-led content, or auramaxxing: posts, video, a podcast, or a newsletter in which the founder says what they actually think. Prospects get to know that person before they ever call, which is the job a referral used to do. Schwab can’t copy it. Its compliance committee will never let one employee publish real opinions.
The second path is a surgical funnel: ads aimed at one kind of prospect, sent to a page, video, or event built for them, with one next step, booking a call. It needs no personality. And a funnel built for physicians can say things Schwab’s never will.
Content builds trust, and funnels turn that trust into booked calls. Do both and it’s a grand slam. Neither runs itself, though, and most firms have a founder with opinions and a budget but nobody to turn either into clients.
Proceed wisely.