Schwab report shows RIAs hiring at great rates, but maybe not for long
Schwab sets rate of RIA salary increase, talks benefits
RIA revenue has skyrocketed with assets since 2015, but RIA total cash compensation – defined as salary, bonuses, profit sharing and dividends – has grown by only 14.5%, well behind the market and inflation.
The devil was in the details. Portfolio manager compensation increased only 7%. Senior Relationship Managers – as a category – achieved salary increases of more than 20%.
Employee equity holdings could also become an issue. Today, only 23% of employed women hold equity in the company. This compares to 77% of male employees, although one in three RIA staff have a stake in their employer.
The findings were contained in Schwab Advisor Services’ latest RIA compensation report. The data ran through 2020 and noted that the as-yet-uncalculated 2021 earnings data would likely increase that earnings percentage.
Broker-dealer Westlake Texas released its RIA compensation analysis Feb. 1, evaluating data on 13,000 employees at 1,036 RIAs. Together they hold approximately $1.5 trillion in the acquisition of Charles Schwab and Schwab, TD Ameritrade.
“To help attract and retain top talent…companies can ensure they have a compelling compensation strategy,” says Lisa Salvi, Schwab’s managing director for business consulting and education, in The report.
If cash salary increases seem less compelling, RIAs can make up for them more on the benefits side.
Performance bonuses and perks like childcare and extra paid time off are also a priority for potential new hires, he continues.
The demand for new RIA staff is expected to continue to put pressure on salaries and benefits.
If the anticipated median asset growth of 12.5% year-over-year holds, the average RIA will need to hire six employees — many senior executives in particular — by 2025, according to the Schwab report.
By 2025, RIA’s median assets under management will likely increase from $439 million to $791 million, its number of clients will increase from 298 to 383, and its revenues will decrease from $2.6 million to 3.8 million, reports Schwab.
Robertson Stephens discovers old magic – maybe for real
Robertson Stephens is still Lazarus. See: With big LPL backing, the Robertson Stephens brand is reborn to offer advisors to the suddenly wealthy.
The San Francisco RIA has doubled its assets under management in the past year to just under $4 billion in assets under management, according to the company.
The once prominent investment banking brand disappeared in 2002 and was removed from the scrap heap in 2013.
But his third round is starting to flourish.
“2021 has been a tremendous year,” CEO Raj Bhattacharyya said in a statement. See: Robertson Stephens seeks rebirth under new CEO after departures that included former
Bhattacharyya took the reins in September 2020, after being parachuted in by Long Arc, the company’s private funder.
Long Arc appointed him as an adviser in late 2019, and the former Deutsche Bank executive joined Robertson Stephens’ board almost immediately afterwards.
The rescue of the Roberston Stephens brand by Long Arc in December 2018 drew heavy criticism from the industry, but it can now point to $3.9 billion in assets under management, down from $511 million at the time of its investment and $1.5 billion when Bhattacharyya succeeded Stuart as CEO. Katz.
Under Katz, Robertson Stephens’ AUM tripled to $1.5 billion at the end of 2020. A former Goldman Sachs executive, Katz joined Robertson Stephens in 2018. He continues to serve as its Chief Investment Officer.
Robertson Stephens has also added 9 new offices since the Long Arc investment, bringing its total to 12, and it employs more than 62 staff, up from nine in January 2019. See: With significant support from LPL, the Robertson Stephens brand is reborn .
No Bitcoin ETFs Until Information Is Easier to Obtain and Share, Says SEC
The Securities and Exchange Commission (SEC) unsurprisingly rejected Fidelity Investment’s spot bitcoin ETF, but surprisingly gave a full explanation why.
It’s not the cryptocurrency itself that’s the problem, but how and where the ETF intersects with it, the Washington, DC regulator explains in its latest ruling against the Boston company’s application.
“It is essential for a publicly traded exchange of a securities derivative … to have the ability to obtain the information necessary to detect, investigate and deter fraud and market manipulation,” the SEC states.
“Bitcoin-based exchange-traded products can meet [their] obligations … by demonstrating that the [linked] Exchange has a full oversight sharing agreement with a significant sized regulated market related to the underlying or reference bitcoin assets,” it continues.
In other words, for ETF makers to sell bitcoin investments, they must first prove a shared and systematic way to detect wrongdoing, the regulator explains.
These fears are exaggerated when it comes to Fidelity.
“We reaffirm our faith in market readiness,” spokeswoman Claire Putzeys told several publications.
The total market capitalization of all cryptocurrencies today stands at $1.7 trillion, up from $2.9 trillion in November, according to Coinmarketcap.
Bitcoin has lost around 40% of its value over the past four months. See: Fidelity Investments applies its proven Peter Jubber to its unproven bitcoin unit and its launch of Fidelity Digital Funds signals that it’s all in the blockchain currency.
Robinhood crisis kicks Tenev and Bhatt out of billionaire club
Investors in Robinhood shares have had a miserable few months as the stock plunges to new depths, and founders Vlad Tenev and Baiju Bhatt are among those getting their hair cut.
Shares of Menlo Park Big Drivers (HOOD) are down nearly 85% from their August high of $70.39. It reached a new low of $11.61 on January 27. The shares have since rebounded slightly and are trading at $15.24, up 7.74% or $1.10 as of mid-morning today (4 Feb).
The stock is down nearly 23% in 2022, significantly underperforming the S&P 500. The index is up about 6% over the same period. The stock is now trading nearly 60% below its July 2021 IPO price, according to NASDAQ.
As a result, Tenev and Bhatt no longer sit at the billionaire table, according to Forbes. The magazine estimates their respective net worth at $845 million and $911 million, down from a high of $4.3 billion and $4.9 billion in August.
The best news is that young entrepreneurs will be able to pay rent and expenses. Each took in about $100 million in stock at the time of the IPO, when shares were trading around $38.
The stock losses reflect the painful losses of the company itself.
Robinhood posted losses of $423 million in the fourth quarter, compared to a profit of $13 million in the same quarter of 2020. Its average annual revenue per user also fell 5%, and revenue of $363 million was down. was 19% lower than the industry forecast of $444. million.