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1. Top-performing firms had strategic and succession plans.

While 73% of top-performing RIA firms in 2020 had written strategic plans, 71% had written succession plans, according to the study.

Top-performing firms were identified by Schwab as those that ranked in the top 20% of the Firm Performance Index, which evaluates all firms in the study based on 15 metrics to arrive at a holistic assessment of each firm's performance across key business areas, it said.

In comparison, 63% of firms with over $250 million in AUM had written strategic plans and 60% had written succession plans, while only 41% of firms with under $250 million in AUM had written strategic plans and just 53% of them had written succession plans.

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Despite the COVID-19 pandemic, several RIA firms were able to adapt to the challenging environment and achieved success last year through various innovative strategies to support their staffs, engage their clients, and drive new business results, according to Charles Schwab's 2021 RIA Benchmarking Study that was released on Tuesday. "2020 was a challenging year that became a catalyst for growth," Lisa Salvi, managing director of business consulting and education at Schwab Advisor Services, told reporters during a virtual media panel held on Tuesday. The median RIA firm ended 2020 with $439 million in assets under management (AUM), she said, noting that represented a five-year compound annual growth rate (CAGR) of 12.5%, with AUM up 14.5% from 2019. AUM for the median RIA firm is expected to grow to $791 million by 2025, Schwab projected. Revenue for the median RIA firm ended 2020 at $2.6 million, up 7.5% with the five-year CAGR up 8% and revenue expected to grow to $3.8 million by 2025, according to Schwab. She also noted that this was the first year in which TD Ameritrade advisors participated in a survey for the annual study. Schwab completed its acquisition of TD Ameritrade in October. The survey was fielded between January and March, and the study contains self-reported data from 1,340 firms that custody their assets with Schwab Advisor Services or TD Ameritrade and represent over $1.5 trillion in AUM. Study results included RIA firms with $25 million or more in AUM. In the gallery above are the top five takeaways from the study on how the top RIA firms were able to find success in 2020 despite the challenges they faced. READ MORE
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Jeff Berman

Jeff joined the ThinkAdvisor team as a staff reporter in July 2019. Before joining ThinkAdvisor, he was a freelance reporter for five years, covering mainly technology, business, media and entertainment news for publications including The Miami Herald, Newsday, TheStreet.com, Long Island Press and multiple American City Business Journals websites. He also reported for several consumer electronics publications and was a technology reporter for publications of the Media & Entertainment Services Alliance. Prior to that, he worked as a reporter and editor for Consumer Electronics Daily and other Warren Communications News publications for 15 years. He graduated with an MA in journalism from New York University.