2016 ria benchmarking study - schwab brokerage · 2016 ria benchmarking study firm profile 3 3.what...

2016 RIABenchmarkingStudy1. Firm Profile 1

2. Clients 5

3. Staffing 12

4. Financials 15

5. Technology and Operations 20

Gain a comprehensive understanding of your firm's strengths and

opportunities by participating in the 2016 RIA Benchmarking Study from

Charles Schwab. Our team will analyze your responses and prepare a

customized Peer Benchmarking Report that can help you gain insight into

your firm's performance and identify practical ways to manage and grow

your business.

Use this blank survey to prepare yourresponses and collect data from other firmmembers. You must enter all data andresponses online between January 26 andMarch 21, 2016. Enter your responses atschwabadvisorcenter.com/benchmarking. Ifyou’ve participated in the past three years,some fields in your survey will beprepopulated.

A minimum level of data is required toprepare a customized report for your firm.You may skip a question if it raises privacyconcerns, but skipping it will reduce theamount of data in your report and mayaffect your ability to benchmark your firm. Ifthe data you provide is insufficient toprepare a report, you’ll be notified duringthe survey and will be unable to submit yoursurvey. Your complimentary report will beavailable in June 2016.

2016 RIA Benchmarking Study Firm Profile

1

Section 1: Firm Profile

Firm Overview

1. The first group of questions is designed to ensure that your firm is benchmarked within the right peergroup.

A. Which of the following most closely describes your firm's business model?

Select one of the following. Refer to the endnotes for important details or definitions.

Financial planner1: We primarily provide financial planning for individual households as well as asset allocation and monitoring.

Wealth manager2: We primarily address the broad financial needs of individual client households through integrated adviceand asset management. Services may include financial planning, discretionary investment management, tax strategies, estateplanning, and trust services.

Money manager3: We primarily provide discretionary investment management for individual client households or institutions.

Institutional investment consultant4: We provide investment strategy, portfolio allocation, money manager selection, andsophisticated performance reporting for institutional clients.

B. Which of the following describe your firm?

Check all that apply.

SEC-registered investment advisor (RIA)

State-registered investment advisor (RIA)

Affiliated with an independent broker-dealer (IBD)

Affiliated with or owned by an accounting firm (CPA)

Other

C. What is the legal structure of your firm?

Select one of the following.

C corporation

S corporation

Limited Liability Company (LLC)

Partnership

Sole proprietorship

D. In what year was your advisory firm founded?

Year founded

E. How many office locations does your firm have?

Number of office locations

F. What is the Zip Code of your primary office?

If your firm has multiple offices, enter a Zip Code that is typical of the markets in which you do business.

Zip Code of your primary office


2

Outlook and Attitudes

2. As you think about your plans for growth, tell us about your goals.

A. Where do you see your firm in five years in terms of assets, revenue, and staff?

Total AUM (enter number in millions: e.g., for $54,000,000 enter $54) $ MM

Total revenue (enter number in actual dollars: e.g., $5,400,000) $ .00

Total number of staff (including principals)

Total number of principals

B. During the next year, are you actively seeking to buy another RIA firm?

Yes

No

C. During the next year, are you actively seeking to bring on a new principal with transferable client assets?

Yes

No

D. During the next year, are you actively seeking to bring on an individual advisor with transferable client assets?

Yes

No


3

3. What are your firm's top three strategic initiatives for 2016?

Please indicate initiatives above and beyond the normal course of business to which you will apply a special level of

thought, planning, or effort to accomplish in 2016. If your exact priority is not included, select the closest option.

Select one initiative at each level: Priority 1, Priority 2, and Priority 3. If you have fewer than three strategic initiatives

for 2016, select "None" in the bottom row under the appropriate priority level.

Priority 1(Select one)



Strategy and Planning

Address or improve strategic planning and execution

Evaluate and potentially change pricing level or structure

Marketing and Business Development/Growth

Acquire new clients through client referrals

Acquire new clients through professional referrals (centers of influence)

Acquire new clients through digital channels (website, social media, online)

Acquire new clients through some means of marketing other than referralsor digital channels

Acquire new clients through a merger with another firm

Bring on a new principal or advisor with assets

Staff and Organization

Make organizational changes (including structure or role definitions)

Recruit new staff to increase the firm's skill set or capacity

Make changes to compensation structure or plan

Develop or revise a succession plan

Operations and Client Service

Improve satisfaction for existing clients

Modify client-service offer to enhance service level

Implement a client segmentation/service differentiation plan

Improve productivity through a new technology investment

Improve productivity through process changes

Improve productivity through staff training and development

Other

None

If you answered "other," please describe your initiative.


4

Strategic and Succession Planning

4. The next questions ask about your firm's strategic plan.

A. Does your firm have a written strategic plan?

Yes

No

B. What is the time frame of your firm's strategic plan?


1 year or less

2 years

3 to 4 years

5 years or more

5. The next questions focus on your firm's succession planning.

A. Does your firm have a written succession plan?

Yes

No

B. Which strategies are you considering for the succession of firm ownership?


Internal succession

Recruiting external successor(s)

Selling the firm

Merging with or acquiring another firm

No succession plan

Other

If you answered "other," please describe your succession strategy.

2016 RIA Benchmarking Study Clients

5

Section 2: Clients

Clients

1. Tell us about the growth in your client base.

In assessing your client base, consider a client to be any household or institutional client. This would include any

individual, group of individuals (such as husband and wife), or institution with whom you hold review meetings and

provide a specific set of services, regardless of the number of individual accounts they may hold. A client may have

multiple accounts—or just one—but an individual account per se is not a client.

A. Provide total number of clients for the following years.

Include both individual households and institutional clients.

2010 2011 2012 2013 2014 2015 2016E

Number of clients (January 1)

Number of new clients (+)

Number of lost clients (-)

Number of clients (December 31)

If your firm did not participate in the 2015 RIA Benchmarking Study, please skip to Question 2.

B. As you reflect on last year's business results, tell us how your firm performed against your client growth target.

2015E 2015A % Change

Number of clients (December 31)

What factors contributed to meeting or exceeding your client growth target for 2015?


A shorter sales cycle

More referrals than expected from existing clients

More referrals than expected from centers of influence (business partners or other professionals)

Greater networking opportunities that led to more clients

Hiring a new principal with a transferable book of business

Hiring new professional staff to give principals more time for business development

Hiring a dedicated business development professional

Improved market conditions/clients more optimistic

Revised estimate during 2015

Other

None


6

What factors contributed to not meeting your client growth target for 2015?


Longer sales cycle

Fewer referrals than expected from existing clients

Fewer referrals than expected from centers of influence (business partners or other professionals)

Fewer networking opportunities than expected

Capacity for business development

Increased competition

Loss of key staff members

Market conditions/clients less optimistic

Revised estimate during 2015

Other

None

If you answered "other," please describe.

2. Tell us about your client base.

A. As of December 31, 2015, how many clients did you have at each asset level below? (Consider total assetsmanaged or advised by your firm per individual client household or institution.)

If exact figures are not available, please provide an estimated number of clients. Use actual number of clients, not

percentage.

Client relationship size Number of clients

Less than $250,000

$250,000 to $500,000

$500,000 to $1 million

$1 million to $2 million




$25 million or more

Total number of clients

If you have clients with more than $25 million in assets, what isthe size of your largest client relationship?

$ MM

B. In 2015, what was your average client relationship size?

Consider per individual client household or institution. If exact figures are not available, please provide an estimate.

Enter number in actual dollars: e.g., $100,000 or $1,100,000.

$ .00


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3. For each approach to client acquisition, please indicate your activity, total number of new clients, andtotal new client assets in 2015 ONLY.

Check the box for those sources of new clients that you pursued during 2015. Then indicate the number of new clients

and total new assets you acquired from each of the checked sources. If exact figures are not available, please provide

an estimated number of new clients and assets. Use actual number of new clients, not percentages, and provide

assets in actual dollars: e.g., $700,000 or $20,500,000.

Pursued thissource

Number ofnew clients

Assets fromnew clients

Referrals from existing clients5$ .00

Referrals from business partners (centersof influence or other professionals)6

$ .00

Seminars and events (excluding referrals) $ .00

Direct mail and email campaigns(excluding referrals)7

$ .00

Social media8$ .00

Website presence9$ .00

Advertising, sponsorships, public relations,or articles

$ .00

Networking and community involvement $ .00

Merger with or acquisition of a firm $ .00

Advisor with transferable assets joined $ .00

Other (e.g., a custodian referral program,cold calls, etc.)

$ .00

None


8

Pricing and Services

4. For your firm's primary service offer, what is your list pricing for asset management?

Example

Provide your total effective fee for one client, by client relationship size. If your firm does not serve clients in one or

more of these categories, leave the field blank and check the box for those categories that are below your minimum

relationship size requirement. If pricing depends on asset mix, then estimate the fee for a typical client situation for

your firm. Note: This is NOT a fee schedule.

Client relationship sizeTotal effective fee

as bps on assets10,11Below current minimum

relationship size

$250,000 bps

$500,000 bps

$1 million bps

$2 million bps

$5 million bps

$10 million bps

$25 million bps


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5. Which services do you include in your primary offering, are they included in your asset managementfee, and which do you provide for an additional fee? If you bill an additional fee, how do you charge?

Select one response from each row. Select the response that best describes your pricing approach.

Offerservice

Included inasset

managementfee

Hourlyrate

Quoted orflat rate

Additionalpercentage of

assets orbalances

Commissionor

product-basedrevenue

Comprehensive financial planning

Asset allocation

Selecting third-party managers andfunds

Selecting individual securities tomaximize performance

Estate planning

Tax planning and strategy

Trustee services

Bank deposits (e.g., CDs, money marketproducts)

Lending (e.g., mortgages, HELOCs,business loans)

Traditional life insurance products

Annuity products (traditional andvariable)

Bill payment

Lifestyle management12

Charitable planning

Family education


10

6. Tell us about your client segmentation strategy.

A. Does your firm have a differentiated service model-based segmentation strategy that is documented andinstitutionalized?

Yes

No

B. Which of the following have you done to support your service differentiation?


Documented defined client groups or client profiles

Documented defined service definitions / standards

Use CRM to track services delivered to client

Use CRM or other method to track staff time spent with clients

Analyzed client profitability

Defined relationship manager roles to serve specific client profiles

Reassigned some firm clients to a different relationship manager

Defined or clarified staff accountability for specific tasks such as sales or service

Hired additional staff

Referred some firm clients to another provider

Changed pricing schedule for existing clients

Adopted a new fee schedule for new client relationships


11

Investments

7. As of December 31, 2015, what percentage of the assets managed by your firm fall into the followingasset classes, and which investment vehicles do you use?

Example

Please estimate if exact figures are not available. Total percentage of assets should sum to 100%. Amount left to

allocate for each row should be 0%.

Percentage by investment vehicle

Percentage ofassets Mutual funds

Individualsecurities ETFs Other

Equity

Domestic % % % % %

International % % % % %

Emerging markets % % % % %

Fixed Income

Corporate % % % % %

Government % % % % %

Municipal % % % % %

International % % % % %

Emerging markets % % % % %

Alternative Investments

Hedge funds % % % % %

Private equity % % % % %

Other

Commodities % % % % %

REITs % % % % %

Other % % % % %

Cash % % % % %

Total percentage 100%

2016 RIA Benchmarking Study Staffing

12

Section 3: Staffing

Staffing and Time Investment

We will use staffing information, combined with time allocation, to estimate the value of staff time devoted to seven areas.Refer to the endnotes for additional details on the activities in each area.

1. Enter the number of full-time equivalent (FTE) staff and the total salary and bonus for each positionduring the 2015 calendar year.

Example

Include each firm member only once in the most appropriate single category. Please enter FTE staff members per

position type (1 full-time staff = 1, 1 half-time staff = 0.5). Do not include owner profit sharing or dividends when

reporting these salary and bonus numbers. Provide salary and bonus numbers in actual dollars: e.g., $100,000 or

$1,100,000. Refer to the endnotes for additional details.

Total numberof staff

in position13

Total salaryfor all staff

in position14

Total bonusfor all staff

in position15

Principals16$ .00 $ .00

Relationship managers17$ .00 $ .00

Investment professionals18$ .00 $ .00

Business development19$ .00 $ .00

Other management20$ .00 $ .00

Back-office and admin staff21$ .00 $ .00

2. For each position during the 2015 calendar year, please estimate the percentage of time spent in eachof the seven categories below.

Carefully consider the percentages that you enter. Refer to the endnotes for additional details.

Principals16Relationshipmanagers17

Investmentprofessionals18

Businessdevelopment19

Othermanagement20

Back-officeand admin

staff21

Client service and meetings22% % % % % %

Financial planning and advice23% % % % % %

Investment management24% % % % % %

Marketing and business development25% % % % % %

Operations and administration26% % % % % %

Business management27% % % % % %

Compliance28% % % % % %

Total 100% 100% 100% 100% 100% 100%


13

3. Indicate the total number of licenses and designations currently held by staff members at your firm.

CertifiedFinancialPlanner(CFP)

CharteredFinancialAnalyst(CFA)

CertifiedPublic

Accountant(CPA)

JurisDoctorate

(JD)InsuranceLicense

SecuritiesLicense

(Series 6,Series 7)

Total number of staff

Hiring Activities

4. Tell us about your hiring activities in 2015.

A. Indicate the number you promoted or brought on in each category, and for each addition indicate the source(s) foreach category.

Enter the number promoted or added in each row, and check all that apply.

Source of addition

Numberpromotedin 2015

Numberaddedin 2015

External hirewith no

transferableassets

External hirewith transferable

assets

Joined viamerger oracquisition

Principals16

Relationship managers17

Investment professionals18

Business development19

Other management20

Back-office and admin staff21

B. During 2015, from what channels did you recruit your external hires?


Bank or trust

Independent broker-dealer

Major wirehouse

RIA firm

Non-financial professional services firm (e.g., law firm, account firm, consulting firm)

Other

C. If you intend to add staff in 2016, please indicate the number you expect to bring on in each category.

Principals16

Relationshipmanagers17

Investmentprofessionals18

Businessdevelopment19

Othermanagement20

Back-office andadmin staff21

Internal promotion

External hire


14

5. Tell us about your onboarding of new advisors with assets.

A. During 2015, how many advisors with transferable assets did you bring on?


1

2

3

4 or more

B. What was your primary motivation for adding an advisor?


Grow assets under management

Gain business development expertise

Prepare for succession

Add new capabilities

C. What was the average size of the assets brought in by an advisor who joined your firm?


Less than $50 million



$250 million or more

6. Tell us about the compensation structure of new advisors with assets.

A. When were new advisors with assets offered equity in the firm?


Equity was offered immediately

Equity will be offered after a period of time

Equity was not offered

B. What payout structure was offered to new advisors with assets?


Salary

Incentive compensation

Percentage of revenue %

2016 RIA Benchmarking Study Financials

15

Section 4: Financials

Assets and Revenue Growth

Describe the historical growth of your firm's AUM and revenue. Growth in AUM and revenue is a critical benchmark ofyour growth compared with that of your peers.

1. Tell us about your assets under management or advisement (custodied at Schwab and at othercustodians).

A.A. Between January 1, 2011, and December 31, 2015, did a significant part of your new/lost client assets come fromacquisition or divestiture?

Yes

No

Between January 1, 2011, and December 31, 2015, did a significant part of your new/lost client assets come fromadvisors joining or leaving with a book of business?

Yes

No

B. Assets under management or advisement for the following years.

Provide numbers in millions; e.g., for $54,000,000 enter 54.

2010 2011 2012 2013 2014 2015 2016E

Discretionary AUM onDecember 3129

$ MM $ MM $ MM $ MM $ MM $ MM $ MM

Non-Discretionary AUM onDecember 31

$ MM $ MM $ MM $ MM $ MM $ MM $ MM

Total AUM on December 31 $ MM $ MM $ MM $ MM $ MM $ MM $ MM

C. How much did each category contribute to your year-end AUM in the following years? Include a minus sign for anegative amount. The amounts, together with your beginning AUM, should add up to your year-end AUM.

Enter "0" when no assets apply to a particular category.

2011 2012 2013 2014 2015

Beginning total AUM (January 1) $ MM $ MM $ MM $ MM $ MM

Assets from new clients (+) $ MM $ MM $ MM $ MM $ MM

Net flows from existing clients (+/-) $ MM $ MM $ MM $ MM $ MM

Assets from lost clients (-) $ MM $ MM $ MM $ MM $ MM

Change due to performance (+/-) $ MM $ MM $ MM $ MM $ MM

Asset flows from advisors joining orleaving (+/-)

$ MM $ MM $ MM $ MM $ MM

Asset flows from acquisition ordivestiture (+/-)

$ MM $ MM $ MM $ MM $ MM

Ending total AUM (December 31) $ MM $ MM $ MM $ MM $ MM


16

2. Provide total firm revenue for the following years.

Provide numbers in actual dollars. Examples: $100,000 or $1,100,000.

2010 2011 2012 2013 2014 2015 2016E

Total firm revenue $ $ $ $ $ $ $ .00

If your firm did not participate in the 2015 RIA Benchmarking Study, please skip to Question 4.

3. As you reflect on last year's business results, how did your firm perform against your AUM and revenuegrowth targets?

2015E 2015A % Change

Total AUM on December 31

Total firm revenue

What factors contributed to meeting or exceeding your AUM growth target for 2015?


More new assets from existing clients than expected

More new clients than expected

Greater average new client size than expected

New principal hired with a transferable book of business

Acquisition of or merger with another RIA firm

Stronger than expected investment performance

Pricing discounts

Estimate revised during 2015

Other

None


17

What factors contributed to not meeting your AUM growth target for 2015?


Fewer new assets from existing clients than expected

Fewer new clients than expected

Lower average new client size than expected

Loss of assets due to principal departure

Weaker than expected investment performance

Increased pricing

Capacity for business development

Estimate revised during 2015

Other

None



18

Statement of Profit and Loss (P&L)

Realizing that some firms prefer not to share P&L data, we do not require you to complete the P&L section to receive aPeer Benchmarking Report. However, only those firms that report complete P&L data here will receive the P&Lbenchmarking section of the report. Please be assured that if you report your firm's financial data, it will not be sharedoutside the benchmarking research team without your permission and will be published only in aggregate.

4. Please enter your firm's profit and loss for 2015.

If you do not have exact figures, please estimate. Provide numbers in actual dollars. Enter "0" when you do not have

revenues or expenses for that category. Refer to the endnotes for additional details on each category.

Revenue 2015

Asset management fees (net of trading costs and outside manager fees) 30$ .00

Project or hourly fees31$ .00

Securities commissions32$ .00

Insurance commissions33$ .00

Other revenues34$ .00

Total Revenue $ .00

Direct Expenses

Professional salaries and commissions

Principals35$ .00

Other professionals(excludes other management, back-office and admin staff)36

$ .00

Professional bonuses and incentive compensation

Principals37$ .00

Other professionals(excludes other management, back-office and admin staff)38

$ .00

Custodial referral program fees and other fees for referred business39$ .00

Total Direct Expenses $ .00

Gross Profit Total Revenue less Direct Expenses $ .00


19

Overhead Expenses

Salaries and bonuses—other management, back-office and admin staff 40$ .00

Retirement benefits

Principals41$ .00

All other staff42$ .00

Health and other employee insurance benefits43$ .00

Payroll taxes44$ .00

Office rent and maintenance45$ .00

Marketing and business development expenses46$ .00

Compliance (outsourcing)47$ .00

Information technology (equipment and outsourcing)48$ .00

Outsourcing (excluding compliance and IT)49$ .00

Equipment (leases, purchases, and maintenance)50$ .00

Office expenses51$ .00

Utilities, phone, and Internet52$ .00

Research expenses53$ .00

Professional services (excluding compliance and IT)54$ .00

Travel and auto expenses (excluding business development)55$ .00

Training, education, and professional dues or licensing56$ .00

Business insurance (P&C, E&O, cyber insurance, etc.)57$ .00

Depreciation and amortization58$ .00

Taxes and licenses (excluding payroll tax)59$ .00

Other overhead60$ .00

Total Overhead Expenses $ .00

Operating Income Gross Profit less Overhead Expenses $ .00

Other Income and Expenses

Other income $ .00

Other expenses $ .00

Total Other Income and Expenses $ .00

Profit Before Tax Operating Income plus Total Other Income and Expenses $ .00

Dividends or Profit Distributions

Dividends to shareholders (C corp) $ .00

Profit distributions (S corp, LLC)

Principals $ .00

All other staff $ .00

Total Profit Distributions $ .00

2016 RIA Benchmarking Study Tech & Ops

20

Section 5: Technology and Operations

Technology and Operations Environment

1. For this set of questions, consider your experience with the systems you use today.

A. Which product are you currently using for the following systems, what percentage of your staff uses it, and whatdid you spend on it in 2015?

If you do not have exact figures, please estimate. Provide numbers in actual dollars. Enter "0" when you did not incur

expenses for that system.

ProductPercentage

of staff using 2015 spend

Client relationship management system (CRM)61% $ .00

Document management system62% $ .00

Financial planning system63% $ .00

Portal or vault to securely share information withclients and third parties

% $ .00

Portfolio management system64% $ .00

Rebalancing system65% $ .00

B. Of the technology systems you currently use, which have had the greatest impact on, or ROI, for your firm?

Select one system at each level: #1, #2, and #3.

#1(Select one)

#2(Select one)

#3(Select one)

Client relationship management system (CRM)

Document management system

Financial planning system

Portal or vault to securely share information with clients and third parties

Portfolio management system

Rebalancing system

None


21

2. Which of the following systems do you plan to convert to a new platform or upgrade in the next 12months, and why?


Operationalefficiency

Improved clientexperience

Improvedfunctionality

Move tothe cloud

No conversion orupgrade planned

Client relationship managementsystem (CRM)61

Document management system62

Financial planning system63

Portal or vault to securely shareinformation with clients and third parties

Portfolio management system64

Rebalancing system65

3. Which of the following were new investments in 2015 or are potential investments in 2016?

Select one response from each row.

Newinvestment

in 2015

Plannedinvestment

in 2016 Neither

Applications

Client relationship management system (CRM)

Document management system

Financial planning system

Portal or vault to securely share information with clients and third parties

Rebalancing system

Mobile

Mobile account access for clients

Mobile access to internal systems for staff

Infrastructure

Local/in-office current server infrastructure

Outsourced server infrastructure

A cloud environment for office applications


22

4. Tell us about your vision for CRM within your firm.

A. Does your firm leverage a CRM as a central point of system and process integration?

Yes

No

B. Rate the current level of CRM adoption at your firm.


Low

Medium

High

C. How many data sources or other systems66 have you integrated with your CRM?


0

1

2

3

4

5 or more

D. Tell us about your use of standardized workflows.


We use highly standardized workflows within our CRM for over 75% of our operational tasks.

We use highly standardized workflows within our CRM for 50% to 75% of our operational tasks.

We use highly standardized workflows within our CRM for 25% to 50% of our operational tasks.

We have standardized and documented procedures, but do not have them in our CRM.

We do not rely upon workflows or documented procedures to manage our operational tasks.

5. Tell us about your firm's outsourcing practices.

A. Which of the following best describes your firm's approach in the last 12 months to outsourcing of technologysystems and data management processes?


In-house—no outsourcing67

Infrastructure outsourcing68

Operational and data management outsourcing69

Full outsourcing70


23

B. Which of the following best describes your firm's likely approach for the next 12 months to outsourcing oftechnology systems and data management processes?


In-house—no outsourcing67

Infrastructure outsourcing68

Operational and data management outsourcing69

Full outsourcing70

6. This set of questions asks about your portfolio rebalancing process.

A. Do you use model portfolios?

Yes

No

B. How standardized are your client portfolio recommendations?71


Highly standardized—We assign standard models to 90% of clients based on their investment goals or client segment.

Moderately customized—We assign standard models to 50% to 90% of clients.

Very customized—We assign standard models to less than 50% of clients; the majority of clients have customized portfolios.

C. Estimate the number of hours your firm spent on rebalancing in 2015.

Rebalancing hours

D. How often do you rebalance client portfolios?


Calendar-based: monthly

Calendar-based: quarterly

Calendar-based: annually

Based on percentage deviation from target

Other

7. Tell us about your current performance reporting process.

A. How often do you provide performance reports to clients?


Monthly

Quarterly

Annually

Upon request

Never


24

B. How are the majority of your client reports produced and delivered?


Hard copy via an in-person meeting

Hard copy through the mail

Soft copy via electronic delivery

C. Have you changed the way you provide reporting to your clients in the last 12 months?


Yes, we have increased the number of reports we send to clients.

Yes, we have reduced the number of reports we send to clients.

Yes, we have simplified the information we send to clients.

Yes, we have both reduced the number of reports and simplified the information we send to clients.

No, we have not changed our client reporting packages.

No, we have not made changes, but we plan to.


25

Automated Investing Platforms

8. This set of questions asks about automated investment management solutions.

A. Does your firm use an automated investment management solution?


Yes

No

Plan to implement in the next 12 months

B. Which platform do you currently use?


Betterment Institutional

Envestnet/Upside

FutureAdvisor

Institutional Intelligent Portfolios sponsored by Schwab Wealth Investment Advisory, Inc.

Jemstep

LearnVest

NestEgg Wealth

Trizic

Other

N/A


C. What is your minimum account size for your offer?


No minimum

$50,000

$100,000

$250,000

$500,000

$1 million

D. How do you price your offer?

Select one of the following. Provide numbers in actual dollars where applicable.

Asset based pricing bps

Hourly $ .00

Quoted or flat rate $ .00

Annual retainer $ .00

Subscription based pricing (per month) $ .00


26

E. Which of the following represent your firm’s primary motivation for implementing an automated investmentmanagement solution?


Use as part of a formal segmentation strategy

Serve existing smaller relationships more profitably

Use as a growth engine to pursue new investor segments (i.e., younger generations)

Expand referral opportunities with our firm

Use to launch a separate entity

Other


2016 RIA Benchmarking Study Appendix A - Examples

27

Clients4. For your firm's primary service offer, what is your list pricing for asset management?

Provide your total effective fee for one client, by client relationship size. If your firm does not serve clients in one or

more of these categories, leave the field blank and check the box for those categories that are below your minimum

relationship size requirement. If pricing depends on asset mix, then estimate the fee for a typical client situation for

your firm. Note: This is NOT a fee schedule.

Example:

Client relationship sizeTotal effective fee

as bps on assets10,11

Below current minimumrelationship size

Total effective feefor one client

$250,000 bps ✓

$500,000 bps ✓

$1 million bps100 $10,000




$25 million bps43 $107,500

This example is provided for illustrative purposes only. Any similarity to an existing firm is purely coincidental.


28

Clients7. As of December 31, 2015, what percentage of the assets managed by your firm fall into the following assetclasses, and which investment vehicles do you use?

Please estimate if exact figures are not available. Total percentage of assets should sum to 100%. Amount left to

allocate for each row should be 0%.

Example:

Percentage by investment vehicle

Percentage of

assets Mutual fundsIndividualsecurities ETFs Other

Equity

Domestic 52% 10% 12% 78% 0%

International 6% 67% 17% 16% 0%

Emerging markets 0% 0% 0% 0% 0%

Fixed Income

Corporate 30% 77% 3% 20% 0%

Government 0% 0% 0% 0% 0%

Municipal 0% 0% 0% 0% 0%

International 0% 0% 0% 0% 0%

Emerging markets 0% 0% 0% 0% 0%

Alternative Investments

Hedge funds 0% 0% 0% 0% 0%

Private equity 1% 100% 0% 0% 0%

Other

Commodities 0% 0% 0% 0% 0%

REITs 0% 0% 0% 0% 0%

Other 10% 0% 0% 0% 100%

Cash 1% 0% 0% 0% 100%

Total percentage 100%



29

Staffing1. Enter the number of full-time equivalent (FTE) staff, and the total salary and bonus for each position during the2015 calendar year.

Include each firm member only once in the most appropriate single category. Please enter FTE staff members per

position type (1 full-time staff = 1, 1 half-time staff = 0.5). Do not include owner profit sharing or dividends when

reporting these salary and bonus numbers. Provide salary and bonus numbers in actual dollars: e.g., $100,000 or

$1,100,000. Refer to the endnotes for additional details.

Example:

Total numberof staff

in position13

Total salaryfor all staff

in position14

Average salaryfor one staff in

position

Total bonusfor all staff

in position15

Average bonusfor one staff in

position

Total salaryand bonus

before profitsharing or

dividends forall staff inposition

Principals16 2 $490,440.00 $245,220.00 $501,062.00 $250,531.00 $991,502.00

Relationship managers17 4 $320,604.00 $80,151.00 $171,000.00 $42,750.00 $491,604.00

Investment professionals18 0

Business development19 0

Other management20 0

Back-office and admin staff21 6 $279,314.00 $46,552.00 $52,000.00 $8,667.00 $331,314.00

Total 12 $1,090,358.00 $724,062.00 $1,814,420.00


2016 RIA Benchmarking Study Endnotes

30

1. Financial planner: Depth of financial planning may vary from one financial planner to another. Typically does not manage individual stock or bondpositions.

2. Wealth manager: May work primarily with funds or individual stock or bond positions. Key differences from financial planner include broaderservices offering and/or managing portfolios of individual securities. Multi-family offices should select this group.

3. Money manager: Typically works with individual stocks and bonds for superior performance or uses funds. A money manager focuses oninvestments and does not offer the broader range of services included in the wealth manager category. Differences from other categories mayinclude working with only a portion of clients' investments, distributing through wholesale channels, or focusing on institutional clients.

4. Institutional investment consultant: Typically does not have discretionary control over investments and may not directly implement investmentstrategies, but rather provides advice to institutional clients on components of the investment management process. Select this category only ifthis is your primary business.

5. Referrals from existing clients: For client referrals combined with a sales seminar, typically the client referral will be the primary channel.

6. Referrals from business partners (centers of influence or other professionals): May include accountants, attorneys, or other financial servicesproviders such as insurance professionals or a custodian's client referral program.

7. Direct mail and email campaigns (excluding referrals): If direct mail results in attendance at an event, the event is probably the relevant salestactic.

8. Social media: May include Facebook, Twitter, LinkedIn, or listing on an online review site such as Yelp.

9. Website presence: May include a firm website with content for existing client relationships, content to attract prospects, and listings on financialservices community websites.

10. Total effective fee as bps on assets: Each entry is a total fee, not a pricing schedule. Sample entries: If your firm does not accept clients at$250,000, leave the entry for $250,000 blank and select the "below current minimum relationship size" checkbox. If your firm accepts $500,000clients at your minimum fee of $10,000 per client, enter 200 bps. If your firm charges 100 bps for the first $1 million and 75 bps for the next $1million, enter 100 bps for a $1 million client and 88 bps for a $2 million client (rounded to the closest 1 bps).

11. Total effective fee for one client: Each line will display a calculated fee based on the asset level displayed and the basis points you enter. Usethese calculated values to verify your basis points fee entry.

12. Lifestyle management: A range of services for helping to manage a client's financial and lifestyle affairs, including family education, philanthropicadvice, and concierge services.

13. Total number of staff in position—Tips for classifying your staff:• Place each staff member in the single category that best fits his or her job responsibilities.

• For anyone working 40 or more hours per week, count that person as 1 full-time equivalent (FTE) staff. Do not count any person as more than 1 FTE.

• For anyone working part time, use a decimal figure to describe his or her work hours (e.g., a half-time person counts as 0.5 FTE).

14. Total salary for all staff in position—Tips for entering salary:• Each entry is for all FTEs; for a role with three FTEs, enter the total amount earned by all three people in that role.

15. Total bonus for all staff in position—Tips for entering bonus:• Professional bonuses and incentive compensation should include direct bonuses based on job performance, and not profit distributions based on firm

ownership.

• Each entry is for all FTEs; for a role with three FTEs, enter the total amount earned by all three people in that role.

16. Principals: Typically the individuals whose names appear on your firm's Form ADV filing. Depending on the principal, work may include relationshipmanagement, investment management, business development, and/or business management responsibilities. Principals may hold an ownershipstake or no ownership and both should be included here. The information entered for Principals is used to calculate your firm's total principalincome and productivity calculations.

17. Relationship managers: Professional staff with primary responsibility for managing existing client relationships, either working with a moreexperienced advisor or on their own. The position may also have secondary responsibility for formulating and implementing advice or developingnew client relationships. Titles include Lead Advisor, Wealth Manager, Investment Advisor, Financial Advisor, and Service Advisor.

18. Investment professionals: Professional staff with primary responsibility for managing investments and developing advice. They typically havespecialized skills in their area of expertise, and may be supported by back-office staff to implement their investment strategies or financial plans.Individuals in this role do not act as the primary relationship manager for clients. Titles include Investment Manager, Portfolio Manager, ResearchAnalyst, Financial Planning Specialist, Tax Specialist, Estate Specialist, Insurance Specialist, and Retirement Specialist.

19. Business development: Professional staff with primary responsibility for developing new business and relatively little responsibility for managingrelationships, providing advice, or serving clients. Titles include Business Development Specialist, Rainmaker, and Director of Sales (if directselling accounts for more than half of the person's time).

20. Other management: Non-client facing staff who spend more than 50% of their time managing the business, rather than developing clientrelationships, serving existing clients, or performing operations and administration tasks. Titles include Chief Executive Officer, Chief OperatingOfficer, Chief Investment Officer, Chief Financial Officer, Chief Compliance Officer, HR Director, Director of Marketing, Director of Sales, Director ofAdvisors, Manager of Client Services, and Operations Manager. If a principal serves in this role, please include in the principal line rather thanhere. Important: If an individual spends at least 50% of his or her time in the direct functional work rather than management of the function,please include that individual in the functional job category rather than the "Other management" category.


31

21. Back-office and admin staff: Back-office support staff who assist the advisors and technical specialists by performing functions related to planpreparation, technical analysis, trading, client service, etc. Titles include Support Advisor, Paraplanner, Tax Preparer, Trader, PortfolioAdministrator, and Client Service Administrator. Administrative staff who support the practice: Titles include Office Manager, Office Administrator,Sales and Marketing Assistant, Executive Assistant, Internal Accountant, Bookkeeper, Network Administrator, IT Support, and Receptionist.

22. Client service and meetings: All client-facing activities across the firm, including:• Client meetings, calls, and events

• Preparations for client facing-activities to interface with planning or investment management staff

• Development and delivery of client communications such as letters, emails, and newsletters

• Oversight of client service delivery by a principal, Director of Client Service, or COO

• DOES NOT INCLUDE financial planning or investment management activities performed by primarily client-facing staff such as principals in dual roles(include time for those individuals in the financial planning or investment management category)

23. Financial planning and advice: All such activities across the firm, including:• Financial planning and advice development, whether by relationship management staff or planning functional experts. Includes all professional services by

specialists outside investment management, such as tax or trust

• Development and delivery of advice to clients, such as presentations to deliver advice

• Oversight of advice development by a principal or COO

• DOES NOT INCLUDE investment management activities performed by primarily client-facing staff such as principals in dual roles (include time for thoseindividuals in the investment management category)

24. Investment management: Establishment and maintenance of the investment management component of your client offer, whether done byprofessionals or support staff, specifically:• Development of investment strategies, asset allocations, model portfolios, as well as setting of investment policy and selection of managers

• Support staff work functions such as modeling, scenario building, and investment research

• Oversight of investment or financial planning activities by a principal, Chief Investment Officer, or Chief Operating Officer

• DOES NOT INCLUDE operational work for investment management such as new client paperwork, rebalancing, and trading (even when done byprofessional staff)

25. Marketing and business development: All marketing and business development activities and the work that supports them, including:• Meetings or events with prospects, and preparation or support for these meetings

• Client development work and networking

• Preparation and execution of marketing plans

• Development or management of PR, advertising, prospect mailings

• Oversight and coordination of marketing and sales activity at the firm by a principal, business development officer, or marketing manager

26. Operations and administration: Operations and administrative support for all functional areas and operations of the firm, including:• Setting up client accounts, TOAs, and account paperwork

• Portfolio rebalancing, trade execution, and confirmation

• Portfolio reporting, client statements, and billing

• Firm internal accounting, financial statements, benefits administration, and payroll

• Network administration and IT support, including installation and maintenance of hardware and software

• Reception, calendaring, and clerical duties

• DOES INCLUDE partner and professional time involved in administrative tasks such as placing trades, verifying trades, verifying account setup information,etc.

• DOES NOT INCLUDE investment management activity conducted by junior-level professional staff, except for operational aspects

• NOTE: Staff 100% productive time excludes vacation and sick time

27. Business management: Business management includes:• Firm leadership, strategic direction, and general business management

• Development and oversight of firm finances such as recording, analysis, and reporting

• Coaching, staff development, and delivery of training

• DOES NOT INCLUDE functional oversight in areas of client service, investment management, marketing and business development, operations andadministration; the "cost" of this oversight and support can be benchmarked as part of those functions

28. Compliance: All activities conducted by any staff member (not just compliance officer) to meet the requirements of state and federal legal andregulatory agencies covering registration, contracts, supervision, privacy policy, books and records, financials, investment activities, fees,advertising, and custody. Activities include:• Establishing, reviewing, and updating the firm's compliance program

• Updating and filing Form ADV

• Registering and updating Form U4

• Reviewing, approving, monitoring, and archiving advertising materials and sales literature

• Distributing written policies to clients regarding information confidentiality

• Establishing solicitor agreements

• Other compliance-related activities

29. Discretionary AUM: Your firm has discretionary authority or manages assets on a discretionary basis if it has the authority to decide whichsecurities to purchase and sell for the client. Your firm also has discretionary authority if it has the authority to decide which investment advisersto retain on behalf of the client.


32

30. Asset management fees: Fees earned for asset management that are calculated based on total assets managed net of trading costs and outsidemanager fees.

31. Project or hourly fees: Project or hourly fees earned for other services such as financial plan preparation, tax planning, or consulting.

32. Securities commissions: Securities commissions revenue.

33. Insurance commissions: Insurance commissions revenue.

34. Other revenues: Fees earned for other services, including lifestyle management and tax preparation.

35. Professional salaries and commissions—Principals: Total salary expense for all principals of the firm, typically individuals whose names appear onyour firm's Form ADV filing. Principals may hold an ownership stake or no ownership and both should be included here.

36. Professional salaries and commissions—Other professionals: Total salary expense for other professionals of the firm such as relationshipmanagers, investment professionals, and business development staff, excluding those individuals in support and administrative roles such asother management and back-office and administrative staff.

37. Professional bonuses and incentive compensation—Principals: Total bonus and incentive compensation expense for all principals of the firm,typically individuals whose names appear on your firm's Form ADV filing. Principals may hold an ownership stake or no ownership and both shouldbe included here. Excludes profit sharing or dividends based on ownership share.

38. Professional bonuses and incentive compensation—Other professionals: Total bonus and incentive compensation expense for other professionalsof the firm such as relationship managers, investment professionals, and business development staff, excluding those individuals in support andadministrative roles such as other management and back-office and administrative staff.

39. Custodial referral program fees and other fees for referred business: Payments to centers of influence who successfully referred business to yourfirm.

40. Salaries and bonuses—Other management, back-office and admin staff: Total salary, bonus, and incentive compensation expense for othermanagement, back-office, and administrative roles.

41. Retirement benefits—Principals: The total cost of all retirement benefits for principals, such as 401(k) or pension plan contributions from the firm.

42. Retirement benefits—All other staff: The total cost of all retirement benefits for all other staff, such as 401(k) or pension plan contributions fromthe firm.

43. Health and other employee insurance benefits: The total cost of providing health and other insurance benefits to employees, including life, vision,medical, and dental insurance. Business-related insurance costs should be included in the line specified for business insurance.

44. Payroll taxes: Total expense for payroll taxes.

45. Office rent and maintenance: The cost associated with occupying office space, such as lease or rent, mortgage payment, maintenance, and repairexpenses.

46. Marketing and business development expenses: All expenses associated with collateral materials, seminars and events, direct mail, advertising,public relations, sponsorships, and any supporting professional services. If available, include travel expenses for business development. Do notinclude marketing staff salaries.

47. Compliance (outsourcing): Expenses associated with outsourcing compliance functions to a third party to ensure your firm complies with allrelevant federal, state, and firm regulations.

48. Information technology (equipment and outsourcing): All costs associated with licensing, purchasing, and maintaining computer software andhardware, including consulting and outsourcing costs. Do not include IT staff salaries.

49. Outsourcing (excluding compliance and IT): Expenses associated with outsourcing functions to a third party (when not included in a bundled ITsolution), including but not limited to payroll processing, data management and reconciliation, client reporting, performance report preparation,client invoicing or management fee billing, employee benefits administration, and recruiting of new staff. Does not include compliance, IT, legal,accounting, or consulting services.

50. Equipment (leases, purchases, and maintenance): Expenses associated with purchasing, leasing, and maintaining office equipment, excluding anyIT equipment.

51. Office expenses: Expenses such as postage, supplies, coffee, and photocopying.

52. Utilities, phone, and Internet: Costs for utilities (heat, light, power), telephone, fax, and Internet access.

53. Research expenses: Subscription or other payments to financial information and research service providers, such as Bloomberg, Baseline, andThomson One.

54. Professional services (excluding compliance and IT): Outside legal, accounting, and consulting costs not related to IT, compliance, or marketingand business development. (Compliance, IT, and marketing and business development expenses are collected elsewhere in this survey.)

55. Travel and auto expenses (excluding business development): Air, train, and auto expenses, including lease/loan payments, gas, insurance, andmaintenance. (Travel related to business development should be included with business development.)

56. Training, education, and professional dues or licensing: All costs incurred for training, continuing education, professional licensing, professionaldevelopment, and dues paid for professional associations and memberships.

57. Business insurance (P&C, E&O, cyber insurance, etc.): All business-related insurance costs. Employee insurance benefits should be included inthe line specified for health and other employee insurance benefits.


33

58. Depreciation and amortization: Depreciation and amortization expense for fixed assets and definite-life intangible assets.

59. Taxes and licenses (excluding payroll tax): The cost for business taxes and licenses, such as property taxes.

60. Other overhead: All other business-related overhead expenses that could not be classified above, such as employee meals and entertainment.

61. Client relationship management system (CRM): A software application or cloud-based, hosted tool that allows you to track attributes about yourclients and prospects, activities, communications, etc. CRM does not refer to a more simplistic contact management system, such as thecapabilities inherent in the Microsoft Outlook email client.

62. Document management system: Systems, software, and/or services that allow firms to scan, store, and manage key client documentselectronically.

63. Financial planning system: Software programs or third-party hosted services that help advisors gather and analyze client financial data in supportof the financial planning process. This does not include systems that focus primarily on portfolio accounting and management.

64. Portfolio management system: Software or systems, on premise or third-party hosted, that track, analyze, and report on client portfolio holdings.This does not include systems that primarily support financial planning activities.

65. Rebalancing system: Software or hosted services, such as Schwab's Portfolio Rebalancer, or third-party systems that allow advisors to rebalanceexisting portfolio holdings against target asset allocations or model portfolios.

66. Data sources or other systems: These can include, but are not limited to, custody data, portfolio management system, document managementsystem, financial planning system, email, client portal, etc.

67. In-house-no outsourcing: Computer hardware infrastructure and portfolio accounting day-to-day data management processes are maintainedentirely in-house.

68. Infrastructure outsourcing: Computer hardware infrastructure is hosted offsite and maintained by a third-party provider.

69. Operational and data management outsourcing: Portfolio accounting day-to-day data management processes are managed by a third-partyprovider.

70. Full outsourcing: Computer hardware infrastructure is hosted offsite and maintained by a third-party provider, and portfolio accounting day-to-daydata management processes are managed by a third-party provider.

71. Standardization—Portfolio recommendations: Client portfolio recommendations refer to the methodology used to make investment decisions foryour client.

©2016 Charles Schwab & Co., Inc. (Schwab). All rights reserved. Member SIPC. Schwab Advisor Services™ includes the custody, trading, and

support services of Charles Schwab. Independent investment advisors are not owned by, affiliated with or supervised by Schwab. (0116-0009)

For institutional audiences only. The study will be open for responses at www.schwabadvisorcenter.com/benchmarking from January 26, 2016

through March 21, 2016. Your customized Peer Benchmarking Report will be available in June 2016.

ALL RESPONSES ARE CONFIDENTIAL. Your individual firm data will not be shared outside of the Schwab RIA Benchmarking Study administrators

without your permission. Firm data will be published only in aggregate form to disguise individual firm results.

www.sipc.org/

2016 RIABenchmarkingStudy6. Compensation 34

Gain a comprehensive understanding of your firm's compensation practices by participating in this specialsection as part of the 2016 RIA Benchmarking Study from Charles Schwab.

Use this blank survey to prepare your responses. Realizing thatsome firms prefer not to share compensation data, we do notrequire you to complete the Compensation section of the survey.However, only those firms that report complete compensationdata will receive the customized Compensation PeerBenchmarking Report.

You must enter all data and responses online betweenJanuary 26 and March 21, 2016. Enter your responses atschwabadvisorcenter.com/benchmarking. Your complimentaryreport will be available in summer 2016.

2016 RIA Benchmarking Study Compensation

1

Section 6: Compensation

Compensation Details

The first section is designed to capture detailed compensation information for each staff member at your firm. A total of 24 roles are grouped into four categories:Client Account Management, Sales and Marketing; Investments; Operations and Administration; and Executive Management.

1. Enter the total number of staff in each role at your firm during the 2015 calendar year.

Include each staff member only once in the most closely related role by job responsibility, not by title. Please enter staff members by position type. If staffmember is part-time, enter as a full-time equivalent (e.g., 2 part-time staff = 2 positions entered). Refer to the endnotes for additional details.

Example

Client Account Management, Sales and Marketing Number of staff

Director of Client Service1

Senior Client Account Manager/Relationship Manager2

Client Account Manager/Relationship Manager3

Client Services Associate4

Business Development/Marketing Professional5

Investments Number of staff

Investment/Portfolio Manager6

Financial Planner7

Research Analyst8

Paraplanner9

Portfolio Administrator10

Trader11

Operations and Administration Number of staff

Operations Director/Manager12

Operations Associate13

Compliance Associate14

Office Manager/Administrator15

Internal Accountant/Bookkeeper16

Executive Assistant17

Receptionist18

Executive Management Number of staff

Chief Executive Officer/President19

Chief Financial Officer20

Chief Compliance Officer21

Chief Investment Officer/Director of Research22

Chief Operating Officer23

Managing Partner24


2

2. Provide compensation data for each staff member at your firm during the 2015 calendar year.

For any part-time staff members, select the typical number of hours worked in a week. If your firm has more than 10 staff in the same role, please providecompensation data for the five lowest-compensated and the five highest-compensated individuals in that role. Provide compensation paid in actual dollars: e.g.,$100,000 or $1,100,000.

Example

Role

General information Compensation details

Zip Code 25 Base salary $ Percentage of ownership 26% Ownership profit distributions 27

$

Hours per week 28 Performance-based incentive pay29 Compensation tied to revenue30

Years of experience 31 Discretionary $ Percentage of new client revenue paid %

Certifications 32 Firm goals $ Total new client revenue generated $

Gender Department or team goals $ Percentage of existing client revenue paid %

Age Business development $ Total existing client revenue generated $

Race/ethnicity


3

Ownership

3. Tell us about the ownership of your firm.

A. Enter the number of individuals or entities that hold ownership in your firm.

Number ofindividuals/entities withownership

Percentageof ownership

Working owners (represented in Compensation Question 2) %

Additional working owners (not represented in Compensation Question 2) %

Non-working owners (e.g., retired founders, spouses/partners, or dependents of founders) %

Outside owners (e.g., accounting firm, private equity firm, strategic acquiring firm, bank) %

Total ownership 100%

B. How many new owners did you add in 2015?

C. What was the average percentage of ownership issued to new owners? %


4

Employee Benefits

4. Which of the following benefits do you offer to employees and their spouse/partner and dependents, if applicable?

Offerbenefit Structure

Percentageof premium

paid for employee

Percentageof premium paid

for spouse/dependents

Average fixedamount paid per

employee annually

Medical insurance % % $ .00

Dental insurance % % $ .00

Vision insurance % % $ .00

Offerbenefit Structure

Percentage of salarythat constitutes benefit

Long-term disability

Short-term disability

Offerbenefit Amount of benefit

Life insurance


5

5. Tell us about your paid time-off (PTO) policy.

A. What type of PTO system does your firm use?


Traditional system with vacation time, sick time, paid holidays, etc.

PTO bank-type system

Unlimited leave

Combination of a traditional system and PTO bank-type system, and/or unlimited leave

Other

None

B. How is PTO awarded?


Accrual basis throughout the year

Credited all at once

Other

C. How many PTO days does an employee receive on an annual basis, based on the employee's tenure?

Select one response for each row. PTO days should not include paid holidays.

10 days orless

11 to 15days

16 to 20days

21 to 25days

26 to 30days

More than30 days

Unlimiteddays

Less than one year of service

1 to 2 years of service





More than 20 years of service


6

D. Which of the following will be observed as paid holidays in 2016?


New Year's Day

Martin Luther King Jr. Day

President's Day/Washington's Birthday

Good Friday

Memorial Day

Independence Day

Labor Day

Columbus Day

Veterans Day

Thanksgiving Day

Day after Thanksgiving Day

Christmas Eve

Christmas Day

Floating Holiday

Other

6. Tell us about your maternity/paternity policy.

A. How many weeks of fully paid maternity leave does your policy allow?

B. How many weeks of partially paid maternity leave does your policy allow?

C. How many weeks of fully paid paternity leave does your policy allow?

D. How many weeks of partially paid paternity leave does your policy allow?


7

7. The next questions ask about your firm's defined contribution plans.

A. What type of defined contribution plans do you offer?


401(k)

Simple IRA

Profit-sharing plan

ESOP

Other

None

B. What is the maximum percentage of employee compensation that is matched or funded by your firm? %

C. Is this match dependent on the employee contribution?

Yes

No

2016 RIA Benchmarking Study Appendix

8

Example: Firm ABC Wealth Management has 4.75 total staff: 2 full-time Client Account Manager/Relationship Managers; 1 full-time Investment/Portfolio Manager;1 full-time Chief Executive Officer/President; and 2 part-time Office Manager/Administrators.

The two Client Account Manager/Relationship Managers received compensation tied to revenue they generated in 2015 and a discretionary bonus. All other staffmembers received performance-based incentive compensation.

1. Enter the total number of staff in each role at your firm during the 2015 calendar year.

Include each staff member only once in the most closely related role by job responsibility, not by title. Please enter staff members by position type. If staffmember is part-time, enter as a full-time equivalent (e.g., 2 part-time staff = 2 positions entered).

Client Account Management, Sales and Marketing Number of staff

Director of Client Service1

Senior Client Account Manager/Relationship Manager2

Client Account Manager/Relationship Manager3 2

Client Services Associate4

Business Development/Marketing Professional5

Investments Number of staff

Investment/Portfolio Manager6 1

Financial Planner7

Research Analyst8

Paraplanner9

Portfolio Administrator10

Trader11

Operations and Administration Number of staff

Operations Director/Manager12

Operations Associate13

Compliance Associate14

Office Manager/Administrator15 2

Internal Accountant/Bookkeeper16

Executive Assistant17

Receptionist18

Executive Management Number of staff

Chief Executive Officer/President19 1

Chief Financial Officer20

Chief Compliance Officer21

Chief Investment Officer/Director of Research22

Chief Operating Officer23

Managing Partner24

Total staff 4.75


9

2. Provide compensation data for each staff member at your firm during the 2015 calendar year.

For any part-time staff members, select the typical number of hours worked in a week. If your firm has more than 10 staff in the same role, please providecompensation data for the five lowest-compensated and the five highest-compensated individuals in that role. Provide compensation paid in actual dollars: e.g.,$100,000 or $1,100,000.

Role Client Account Manager/Relationship Manager


Zip Code 2594105 Base salary $125,000 Percentage of ownership 26

5% Ownership profit distributions 27$40,000

Hours per week 28 40 Performance-based incentive pay29 Compensation tied to revenue30

Years of experience 31 10 to 14 Discretionary $5,000 Percentage of new client revenue paid 5%

Certifications 32CFP Firm goals $0 Total new client revenue generated $635,000

Gender Male Department or team goals $0 Percentage of existing client revenue paid 0%

Age 40 to 49 Business development $0 Total existing client revenue generated $0

Race/ethnicity White


10

Role Client Account Manager/Relationship Manager





Years of experience 31 20 or more Discretionary $10,000 Percentage of new client revenue paid 5%

Certifications 32CFP Firm goals $0 Total new client revenue generated $725,000

Gender Female Department or team goals $0 Percentage of existing client revenue paid 0%


Race/ethnicity Hispanic or Latino

Role Investment/Portfolio Manager





Years of experience 315 to 9 Discretionary $36,000 Percentage of new client revenue paid 0%

Certifications 32 CFP Firm goals $0 Total new client revenue generated $0





11

Role Office Manager/Administrator



0% Ownership profit distributions 27$-


Years of experience 31 10 to 14 Discretionary $15,000 Percentage of new client revenue paid 0%

Certifications 32None Firm goals $0 Total new client revenue generated $0

Gender Female Department or team goals $0 Percentage of existing client revenue paid 0%



Role Office Manager/Administrator



0% Ownership profit distributions 27$-


Years of experience 3110 to 14 Discretionary $15,000 Percentage of new client revenue paid 0%

Certifications 32 None Firm goals $0 Total new client revenue generated $0





12

Role Chief Executive Officer/President





Years of experience 31 20 or more Discretionary $0 Percentage of new client revenue paid 0%

Certifications 32CFA Firm goals $0 Total new client revenue generated $0



Race/ethnicity Asian



13

Use this worksheet to collect compensation data for your staff members. Make copies of this worksheet as necessary.

Role



$






Race/ethnicity

Role



$






Race/ethnicity


14

Client Account Management, Sales and Marketing

1. Director of Client Service: Manages the client service activities for theentire firm or a specific business area. Coordinates client serviceactivities with those of sales and marketing staff. Supervises clientservice staff. Tracks and reports results of key service measuresagainst firm objectives. Leads resolution of problems related to clientservice. May manage relationships with key clients and prospects.

2. Senior Client Account Manager/Relationship Manager: Mostexperienced advisory position within the firm. Primary managers ofexisting client relationships, particularly more complex relationships.Formulates and implements advice but may rely on technicalspecialists to develop recommendations within an individualspecialist's area of expertise. Often works with, trains, and supervisesother staff in client service delivery.

3. Client Account Manager/Relationship Manager: Manages existingclient relationships, either working with a principal or moreexperienced advisor, or on their own. Provides client servicemanagement, often to small and midsize accounts, assists seniorprofessionals in conducting client meetings, and resolves basic androutine client account issues.

4. Client Services Associate: Provides non-advice-related support toclients, including preparing standard client reports, maintainingcontact with clients to provide or obtain updated information,scheduling client meetings, and responding to administrative clientqueries.

5. Business Development/Marketing Professional: Develops newbusiness, with relatively little responsibility (less than 10% of time) formanaging relationships, providing advice, or serving clients. Mayimplement marketing plans and programs, assist in developing newmarketing and advertising campaigns, and develop strategiccommunications deliverables.

Investments

6. Investment/Portfolio Manager: Actively manages a client portfoliousing individual securities or a combination of securities andthird-party managers. May participate in or develop an investmentstrategy. (Note that this position describes an active-style internalmanager.)

7. Financial Planner: Provides financial planning to the clients of the leadand service advisors. Serves as in-house expert on financial planningissues. Does not act as primary relationship manager.

8. Research Analyst: Performs research and analysis and/or managesinvestment options. Provides information and makes recommendationsto professional staff on managers, advisory service products,investment selection, suitability guidelines, and reporting.

9. Paraplanner: Provides technical support to the Client AccountManager/Relationship Manager roles in the delivery of advice toclients. Responsibilities include data gathering, modeling, case design,plan development, presentation development, etc. May participate inclient meetings but not in an advice capacity. Has no decision-makingauthority on client matters.

10. Portfolio Administrator: Sets up and maintains client accounts;compiles and completes client, custodian, and firm paperwork; reviewsand maintains client transactions and activity; and executes client andfirm tasks, such as asset transfers, preparation of reports, and generalsupport of portfolio and investment strategies.

11. Trader: Buys and sells securities as directed by the portfoliomanagers, advisors, or CIO.

2016 RIA Benchmarking Study Compensation - Endnotes

15

Operations and Administration

12. Operations Director/Manager: Manages daily activities within theoperations department (e.g., trading and reporting) and serves as anintermediary between the department and top management. Typicallysupervises operations staff and may be responsible for establishing orcontributing ideas for department process, procedures, and protocols.

13. Operations Associate: Performs daily activities within the operationsdepartment. May provide network administration/IT support to staff.

14. Compliance Associate: Assists and implements firm's complianceprogram.

15. Office Manager/Administrator: Responsible for general officeoperations, such as internal accounting, office equipment andsupplies, benefits administration, and payroll coordination. May alsocoordinate firm website or other marketing tools. This is a catch-allfunction in firms that do not employ multiple staff members for each ofthese functions.

16. Internal Accountant/Bookkeeper: Performs internal accounting andgenerates the firm's financial statements.

17. Executive Assistant: Handles a variety of administrative functions toaid a dedicated manager of the firm. May perform secretarial andclerical duties as needed by the dedicated manager.

18. Receptionist: Greets and directs clients and other visitors. Screensand routes telephone calls. May perform incidental typing or otherroutine clerical duties.

Executive Management

19. Chief Executive Officer/President: Generally provides strategicleadership, planning, and broad executive management to achieve thefirm's strategic objectives. Typically spends less than 50% of his or hertime delivering advice and/or generating business. If the staff memberin this position spends more than 50% of his or her time deliveringadvice and/or generating business, use one of the professionalpositions as the primary role.

20. Chief Financial Officer: Establishes policies and procedures foreffective recording, analyzing, and reporting of all financial matters ofthe organization.

21. Chief Compliance Officer: Develops and monitors the firm'scompliance program, ensuring that all activities meet the requirementsof state and federal legal and regulatory agencies. Acts as a liaisonwith regulatory agencies on compliance-related issues in response tocomplaints.

22. Chief Investment Officer/Director of Research: Plans and directs allaspects of an organization's investment programs. Oversees theresearch, evaluation, and selection of investment vehicles and makessure investment selections are aligned with the organization's goals.

23. Chief Operating Officer: Directs, administers, and coordinates theactivities of the organization in accordance with policies, goals, andobjectives of the firm. This is purely a management function and is notresponsible for revenue production.

24. Managing Partner: Owner and principal of the business, with broadresponsibilities for business development, client relationships, service,and management. Responsible for developing new business, managingrelationships, providing advice, or serving clients. In addition, hasshared responsibility of strategic leadership, planning, and broadexecutive management decisions to achieve the firm's strategicobjectives.

2016 RIA Benchmarking Study Compensation - Endnotes

16

25. Zip Code: Enter the Zip Code for the primary office of the staff member.

26. Percentage of ownership: The ownership stake in the firm the staff member holds.

27. Ownership profit distributions: Total dollars paid to the individual owner based on their percentage of ownership.

28. Hours per week: Tips for entering hours per week:• 40 will be selected by default to enter information for a full time position• For individuals that worked less than full time, select the hours per week which most closely represent the average weekly hours worked.

29. Performance-based incentive pay: Tips for entering performance-based incentive pay:• Discretionary compensation should include cash paid to the staff member as a reward for individual performance. Typically, this compensation is not tied to

a financial goal or metric.• Firm goals should include compensation paid to the staff member for the firm achieving its goals. Typically, firm goals are determined at the beginning of

the fiscal year and have a defined distribution formula.• Department or team goals should include compensation paid to the staff member for their department or team achieving a pre-defined metric.• Business development should include compensation paid to the staff member for any new business generated by the individual.

30. Compensation tied to revenue: Tips for entering Compensation tied to revenue:• Percentage of new client revenue paid: The total percentage of revenue paid to the staff member for revenue generated from their new clients.• Total new client revenue generated: The total amount of new client revenue generated by the staff member. This total amount will be used in combination

with the percentage of new client revenue paid to calculate the actual cash paid to the staff member.• Percentage of existing client revenue paid: The total percentage of revenue paid to the staff member for revenue generated from their existing clients.• Total existing client revenue generated: The total amount of existing client revenue generated by the staff member. This total amount will be used in

combination with the percentage of existing client revenue paid to calculate the actual cash paid to the staff member.

31. Years of experience: Tips for classifying years of experience:• Years of experience should be reflective of the specific role or prior roles with similar job functions.• Do not include prior professional experience if it is not directly related to the current role.

32. Certifications: Certifications and professional designations include Chartered Financial Analyst (CFA), Certified Public Accountant (CPA), CertifiedFinancial Planner (CFP), and Juris Doctor (JD).

©2016 Charles Schwab & Co., Inc. (Schwab). All rights reserved. Member SIPC. Schwab Advisor ServicesTM includes the custody, trading, and support services of Charles Schwab. Independent

investment advisors are not owned by, affiliated with or supervised by Schwab. (0116-0009)

For institutional audiences only. The study will be open for responses at www.schwabadvisorcenter.com/benchmarking from January 26 through March 21, 2016. Your customized Compensation

Peer Benchmarking Report will be available in summer 2016.

ALL RESPONSES ARE CONFIDENTIAL. Your individual firm data will not be shared outside of the Schwab RIA Benchmarking Study administrators without your permission. Firm data will be published

only in aggregate form to disguise individual firm results.

www.sipc.org/

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