Registered investment advisers' assets under management increased by a median of 20% in 2006 and their revenue rose 16%, according to a study by Schwab Institutional.
From 2003 to 2006, the client bases at the firms surveyed grew by 8% a year. The average client size rose 42%, to $1.04 million, the study said.
David Welling, vice president of marketing and adviser business management at Schwab Institutional, said in a press release Thursday, "Independent advisers are experiencing phenomenal growth and the future remains very bright, because asset and revenue growth are far exceeding client growth, which should lead to increased firm profitability."
More than 50% of the firms' asset growth came from new clients, and 88% of those new clients were generated by referrals from existing clients (59%) or professionals (29%).
The fastest-growing firms, excluding investment performance, generate two to three times as many referrals as the typical firm, the study said.
Schwab Institutional, a division of Charles Schwab & Co., provides custodial, operational, and trading support for independent investment advisers. It has approximately $556 billion of assets under custody.
