Schwab PowerPoint template

Please remove before using The Careers in the Independent Advisor Industry presentation was developed for use in recruiting and outreach efforts. The customizable presentation will help tell the story of what an independent Registered Investment Advisor is, and why the work they do is so important. We believe its a powerful tool that can help raise awareness and understanding of the industry while attracting the diverse talent needed to carry firms into the future. Please remove before using Using this presentation This presentation is intended to be used to support Registered Investment Advisor recruitment efforts and to help create awareness of the RIA profession among students and career changers. Audiences and venues We encourage you to develop local or regional events to attract potential candidates from students to midcareer professionals.

Consider delivering this presentation jointly or on your own -- to prospective candidates in a variety of venues, including: Undergraduate/MBA on-campus student groups Financial industry educational and networking events Individual meetings with college career counselors Individual meetings with job candidates Where to find Download a copy of this presentation from our RIA Talent Advantage site, under our Recruiting Talent section. Share your thoughts Share any success stories you have in using the presentation type/size of audiences, effectiveness of the content, feedback from the audience, and any suggestions for improving the presentation. Please send feedback to the RIA Talent Advantage Team at [email protected] A Please remove before using Using this presentation (contd) Presentation Layout The presentation was designed with sections that: 1. Give an overview of the industry 2. Discuss the benefits to the investor of the RIA model

3. Highlight the benefits of choosing this career path 4. Point out considerations for working for an RIA firm, including: Firm size Client type Services offered Licensing requirements B Please remove before using Using this presentation (contd) Instructions Options to customize the content 1. Save a copy of this PowerPoint presentation to your computer 1. Delete instructions [in brackets] and instruction slides

2. Click View and then click Slide Master 2. 3. Make sure youre on the first Master slide, delete the Your Firm logo placeholder and insert your firms logo or simply type in your firm name. Rearrange the slide order or delete slides to suit the message(s) youd like to cover and your audience 3. Add your own slides 4. Click the X in the Close Master View box on the far right on task ribbon to return to normal view 4.

Remember to update the page numbers based on changes youve made to the overall presentation 5. Delete the first four slides of this presentation 5. Consider having your Compliance officer review your now customized presentation and add any appropriate disclosures prior to sharing with your audience NOTE: Optional speaker notes are also included to assist in delivering the presentation Careers the title style Click to edit in Master Independent Advisor industry [This presentation is a

powerful and customizable recruiting tool that allows you to connect with prospective talent, showcase the benefits to investors and candidates of the independent Registered Investment Advisor (RIA) model, and explain the path to becoming an advisor working for an RIA firm. By explaining the appeal and the importance of independent RIAs, you can help solidify long-term success for the industry.] For me, there cannot be a better job. Im helping people, Im well paid, and I love what IRIA do. firm owner of 25+ years Experiences expressed are no guarantee of future performance or success and may not be representative of your experience.

2 How would you like a career that Provides opportunities for you to make a difference in peoples lives Allows greater control over your working environment Gives you more control over your earning power Offers freedom and fulfillment Lets you have more control over your work-life balance Leverages both your analytical skills

and emotional intelligence Working at an independent Registered Investment Advisor (RIA) firm can offer each of these elementsand more. Yet it is an often overlooked opportunity in financial services. 3 Registered Investment Advisor (RIA): Professional advisory firm that offers personalized financial advice to clients who require a high level of investment management strategy and consultation. 1 1. RIA firms register with the Securities and Exchange Commission or state securities regulators and are subject to the Investment Advisers Act of 1940. State-registered advisors are subject to state-specific securities rules if state registered, that may differ from federal regulation. Individual advisors are subject to the same standard as the RIA whether the individual is required to be registered or not. 4 RIAs can support individuals lives and financial well-being Every investor encounters life events: Preparing for the future Marriage and family New house

Saving for college Sale of a business Retirement To meet these various investor needs, RIAs can provide a range of services: Financial planning Investment management Tax planning Estate planning Retirement planning Wealth management Unplanned events Death of a spouse Divorce 5 Overview of the RIA industry 6 The RIA industry is one of the fastest-growing segments in financial services, with the potential for even more growth

$4 trillion in assets1 $1 trillion in growth in next two years2 $23 trillion market opportunity3 1. Cerulli Associates company reports, 2014 and Charles Schwab Strategy estimates, 2014, marketwatch.com. 2. Charles Schwab Analytics, Insight & Loyalty, May 2014. Cerulli Associates, company reports, 2014, Charles Schwab Strategy estimates, 2014. 3. Schwab Strategy estimates, individual company financial reports, FDIC, ICI, Federal Research Flow of Funds, Cerulli Associates, and Discovery Database. Based on households with over $500K in assets. All sources 2013. 7 Employees The industry is in greater demand as a career choice as well 51,000 employees

52,000 50,000 48,000 46,000 44,000 42,000 40,000 2014 2017 RIA model1 Traditional model2 1. Source: RIA Marketplace 2014: Growth Drivers in an Accelerating Industry Segment, Cerulli Associates, 2014. 2. Traditional model = Banks, Wirehouse, and Brokerage Firms 8

Working for a smaller company and work-life balance are among the many reasons why advisors choose RIA firms Total advisors1 Includes mentions such as to be independent, ownership/to be my own boss, to better serve clients 49% 47% 41% 37% 32% 32% 26% 5% Interest in working at a

smaller company Greater work-life balance Potential for greater earnings/ compensation Opportunity to contribute to firm growth Greater choice of financial products Opportunity for greater career advancement Opportunity to rebuild a career

after being away from the workforce Other Men and women report similar incentives, with no significant differences 1. 2014 RIA Talent Study, conducted for Schwab Advisor Services by Koski Research, June 2014. 9 Why should you join an RIA firm? Be part of a dynamic industry You get new clients every day with different problems that you get to help them solve. You get to see the direct impact on peoples lives. Independent Advisor Enjoy the potential to own your own business Ive always wanted to have my own business. So by going independent, I created a business value, and I have an asset that Ive worked so

hard to create for the past 27 years. Independent Advisor Feel the satisfaction of helping people reach their goals We foster close relationships with our clients as we build their confidence in their financial future. We believe that our clients trust that we have their best interests in mind, and that allows our team to build long-standing relationships. Independent Advisor Connect your strengths through specialization The focus of the firm has been many times with clients in transition, and a lot of times we find that clients are going through different phases of life, whether its going through a divorce or a major inheritance or the sale of a business, or it could be the death of a spouse. Independent Advisor Leave time in your life for other pursuits

Success is not just revenues that our firm generatesits us having a policy of people being at home with their families and not always focused on hours here at work. Independent Advisor Sentiments expressed above are based on Advisors opinions and are for illustrative purposes only. 10 RIAs can offer a powerful value proposition for investors Many Independent Advisors:1 Provide tailored advice based on investors goals Offer a fee structure that is simple, transparent, and easy to understand, and that gives advisors an incentive to grow client assets Investors appreciate the RIA approach2 More than half of new clients and assets come from existing client referrals.

51% Provide advice for complex needs Form close relationships with clients and have a strong sense of accountability RIAs have a 97% client retention rate. 97% Use institutional custodians, such as brokerage firms, to help safeguard clients assets 1. These characteristics can apply to other financial services professionals and are not unique to Independent Advisors. 2. Median results for all firms with $250 million or more in assets under management (AUM). 2015 RIA Benchmarking Study from Charles Schwab, fielded January to March 2015. Study contains self-reported data from 1,007 firms. Participant firms represent various sizes and business models categorized into 12 peer groups7 wealth manager groups and 5 money manager groups, by AUM size. 11 Considerations when pursuing a career with an RIA firm

12 RIAs come in all shapes and sizes Firm structure1 RIA firms range in size from sole proprietors to firms with 100+ employees. Small to medium-size firms tend to have two partners or individuals who own a share in the firm. Roles and responsibilities Employees of RIAs can be responsible for a variety of tasks: Portfolio/investment management Client services Operations/trading Compliance Technology Marketing Human resources Administration support As firms grow in size, RIAs tend to hire individuals for more specialized roles and functions.

1. 2015 RIA Benchmarking Study from Charles Schwab, fielded January to March 2015. Study contains self-reported data from 1,007 firms. Participant firms represent various sizes and business models categorized into 12 peer groups7 wealth manager groups and 5 money manager groups, by AUM size. 13 RIAs serve a variety of client types Individualssingles, couples, families, entrepreneurs Institutionssmall and mediumsize firms, 401(k) plans, pension funds Nonprofits and endowments universities, charitable organizations, foundations Firms typically serve 319 clients (median)1

Clients average $1.7 million in assets1 1. Median results for all firms with $250 million or more in AUM. 2015 RIA Benchmarking Study from Charles Schwab, fielded January to March 2015. Study contains self-reported data from 1,007 firms. Participant firms represent various sizes and business models categorized into 12 peer groups7 wealth manager groups and 5 money manager groups, by AUM size. 14 RIAs offer a variety of services1 Comprehensive financial planning Asset allocation Selecting third-party managers and funds Selecting individual securities to maximize performance Estate planning

Tax planning and strategy Charitable planning Family education 1. 2015 RIA Benchmarking Study from Charles Schwab, fielded January to March 2015. Study contains self-reported data from 1,007 firms. Participant firms represent various sizes and business models categorized into 12 peer groups7 wealth manager groups and 5 money manager groups, by AUM size. 15 Working at an RIA may require licensing Series 65 registration1 Uniform Investment Adviser Law Exam Required by most states for individuals who act as investment advisors and provide investment advice to clients 130 questions plus 10 pre-test questions with a minimum passing score of 72%

Topics covered: Economic factors and business information Other registration requirements vary depending on the services RIAs provide and include:2 Certified Financial Planner (CFP) Chartered Financial Analyst (CFA) Personal Financial Specialist (PFS) Certified Investment Management Analyst (CIMA) Chartered Investment Counselor (CIC) Chartered Financial Consultant (ChFC) Investment vehicle characteristics Client investment recommendations and strategies Laws, regulations and guidelines, including prohibition on unethical business practices Successful RIAs also tend to demonstrate emotional intelligence, which includes the ability to relate to people, show empathy, be service-focused, listen closely, and be attentive to client needs. 1. 2. North American Securities Administrators Association, accessed June 18, 2015, www.nasaa.org. Obtaining one of these registrations may make you exempt from the Series 65 exam. 16

Evolving diversity in the RIA industry RIA firms are embracing diversity Women, younger people, and culturally and ethnically diverse investors are controlling more assets and asserting more influence over investment decisions. 55% of independent advisors believe that the next generation of investors will be more diverse and that their firms will have to reflect that diversity.4 1. Center for Talent Innovation, Harnessing the Power of the Purse, 2014 2. Cerulli Report, U.S. Retail Investor Advice Relationships 2015 Aligning with Investor Goals, Exhibit 3.06 3. A Diversity Problem, Investment News, December 14, 2015 4. Fortune 500 Women Executive Officers and Top Earners. 2013 Catalyst Census, December 2013 18

African Americans make up 2% of the employees in RIA firms Asians make up 3% of the employees in RIA firms Hispanics make up 2% of the employees in RIA firms Caucasians make up 90% of the employees in RIA firms Source: 2016 RIA Benchmarking Study from Charles Schwab - The 2016 RIA Benchmarking Study collected detailed compensation information from 817 advisory firms representing 8,910 employees across 24 roles typically found at RIA firms. Percentage calculations exclude the Decline to share responses which comprise 28% of the overall responses. The study fielded from January to March 2016, comprises self-reported data from advisory firms that custody their assets with Schwab Advisor Services. The self-reported information

provided by individual advisory firms was not independently verified. Participant firms represent various sizes and business models. Information classification here 19 Women hold 46% of roles as RIA firms serve a growing and diverse client base Male Source: 2016 RIA Benchmarking Study from Charles Schwab Female 20 38% of RIA employees currently working in professional roles are between the ages of 20-39 Source: 2016 RIA Benchmarking Study from Charles Schwab Professional roles include: Business Development/Marketing Professional Chief Compliance Officer

Chief Executive Officer/President Chief Financial Officer Chief Investment Officer/Director of Research Chief Operating Officer Client Account Manager/Relationship Manager Compliance Associate Director of Client Service Financial Planner Investment/Portfolio Manager Managing Partner Operations Associate Operations Director/Manager Paraplanner Research Analyst Senior Client Account Manager / Relationship Manager Trader

21 RIA firms appreciate the value created by a diverse work force and are establishing inclusive cultures where diverse talent is represented and well integrated throughout all levels of the organization. 22 Resources Click to edit Master title style Get involved and look for opportunities Get involved with industry organizations The Financial Planning Association http://www.fpanet.org/ FPA NexGen! This is a community for FPA members age 36 and under that focuses on the next generation of financial professionals. http://

www.onefpa.org/community/nexgen/Pages/Welcome%20to%20the%20Nex Gen%20Community.aspx Certified Financial Planner (CFP) Board http://www.cfp.net/ Financial Womens Association http://fwa.org/ National Association of Insurance and Financial Advisors http:www.naifa.org / The National Association of Personal Financial Advisors http://napfa.org/ Look for career opportunities Schwabs RIA Career Opportunity Service http:// advisorservices.schwab.com/public/advisor/nn/transition/transition_planning/c areer_opportunity_service Schwabs advisor directory http://riastandsforyou.com/FindAdvisor CFP Board's career center http://www.cfp.net/career-center

Key search terms: RIA and Registered Investment Advisor 24 Make an informed decision Read industry publications Financial Planning (http://www.financial-planning.com/) Financial Advisor (http://www.fa-mag.com/) ThinkAdvisor (http://www.thinkadvisor.com/) InvestmentNews (http://www.investmentnews.com/) RIABiz (http://www.riabiz.com/)

Trusts & Estates (http://wealthmanagement.com/subscriptions) Learn what potential clients/investors need to know RIAStandsForYou.com http://riastandsforyou.com/ Pay special attention to the resources on the Benefit of RIAs tab. The Wall Street Journal: Thinking About Hiring an RIA? Here Are 10 Things You Should Know http://riastandsforyou.com/assets/pdf/WSJ_reprint_44777.pdf Worth magazine: Have You Outgrown Your Financial Advisor? http://www.riastandsforyou.com/assets/pdf/2618-WO29_Charles%20Schwab_E-Print.pdf 5 Key Benefits of Independent Registered Investment Advisors http://riastandsforyou.com/assets/pdf/SLS63879.pdf Key search terms: emotional intelligence and financial planning

25 Q&A 26 Thank you Click to edit Master title style 27

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