Schwab Reaches Milestone With Independents: More Than 500 Advisor Teams Have Made the Move

Monday, January 25, 2010 9:00 am PST



Public Company Information:


SAN FRANCISCO--(BUSINESS WIRE)--Confirming the growing appeal of the independent investment advisor industry, Schwab announced today that it has helped more than 500 advisor teams convert to independence since the company began focusing on this segment in 2005. These teams manage $45.5 billion of the total $590 billion currently custodied at Schwab. In 2009, Schwab had a record year, supporting 172 new advisory teams as they either started or joined an independent firm, a 40 percent increase from 2008.

In 2009, Schwab also held a record number of educational events for advisors considering starting or joining an independent firm, hosting 33 in-person events around the country for more than 200 prospective advisor teams representing more than $20 billion in assets under management. Educational webcasts on topics ranging from the economics of independence to legal implications were attended by more than 800 advisors representing more than $60 billion in assets under management.

“The trend of advisors and clients turning to the independent model has been building over the last several years,” said Bernie Clark, senior vice president of sales and relationship management for Schwab Advisor Services. “Schwab has set new records every year since 2005 for new advisors and new assets, and we have spent considerable time and resources building a platform that helps new advisors strike out on their own while also benefiting the more than 6,000 independent investment advisor firms we serve every day.”

Newly independent advisors were responsible for $13 billion of the $41 billion in net new assets Schwab Advisor Services secured in 2009. New advisors continued to contribute to the growth of assets in Schwab’s managed account platform, which brought in $3.94 billion in net new assets in 2009 from all advisors. Schwab is now the fifth largest provider of managed account services and the largest platform available to independent advisors, with more than 1,000 managers, 3,000 strategies, and $32.2 billion assets managed by advisors as of Dec. 31, 2009. New advisors also played a significant role in the growth of Schwab’s two trust platforms; they represented 36 percent of net new assets into Schwab Advisor Service's Personal Trust Reporting System in 2009, and 49 percent of net new assets into the administrative or directed trustee option, from the Administrative Trustee Services offering provided by the Personal Trust Services Division of Charles Schwab Bank.

Enhanced Services for Advisors Considering Independence

In 2009, Schwab continued to enhance its Business Start-up Solutions platform for advisors, which debuted in June 2008. This comprehensive platform for transitioning advisors includes a wide array of services from Schwab, such as strategic planning assistance and back office services, and from third parties, including office establishment resources and marketing support. Last year, more than 100 newly independent advisors used at least one resource on the Business Start-up Solutions platform. Specific services available to advisors through third-party providers include access to marketing tools and discounts on collateral, healthcare and benefits services through TriNet, premium pricing for Errors & Omissions insurance, and access to other vendors and discount programs. Enhancements in 2009 included the addition of eHealth, a leading online insurance provider. Services through TriNet are available to all advisors who custody assets with Schwab Advisor Services.

In 2009, Schwab also made progress on deepening relationships with independent broker dealers to help serve advisors who have both fee-based and commission-based business. Approximately one-third of advisors who custody assets with Schwab have a relationship with an independent broker-dealer for commission business, and Schwab has established relationships with more than 100 broker-dealers to support these advisors.

Other tools and services that Schwab introduced in 2009 to benefit new and transitioning advisors include:

  • A proprietary financial simulator that allows advisors to model their start-up costs, their seven year profit and loss (P&L) predictions, and their estimates of the potential future value of their businesses. Advisors are also able to use the tool to compare different independence options and evaluate the economics of the RIA model. Schwab used this simulator during more than 150 in-person meetings in the past 18 months, including meetings with existing advisory firms to help them examine the potential economics of hiring a new advisor.
  • An Investment Proposal Center, which includes an in-depth research functionality that allows advisors to analyze money managers and investment products, including mutual funds, separately managed accounts and ETFs, based on specific criteria. They can then compare their investment recommendations for clients and prospects to an existing portfolio or against certain industry benchmarks and create professional-looking, customized proposals. Available to all firms that custody with Schwab Advisor Services, this tool is particularly popular with newly independent advisors who have used similar applications in their prior positions. More than 1,000 advisors recently registered to attend a webcast to learn how to use the Investment Proposal Center.
  • A white paper entitled A Case for Starting or Joining a Registered Investment Advisory (RIA) Firm was released in August 2009. Drawing on case studies, industry research, financial modeling, and Schwab’s deep experience with transitioning advisors, the report examines the economics of independence, the advisor’s options for moving forward, and the role of the custodian. It examines the heightened interest in joining established RIAs, as well as the steady pace of mergers and acquisition activity among RIA firms.
  • A new relationship with Fortigent®, LLC to introduce its Unified Managed Account (UMA) to more clients and prospective clients. Since the relationship began in September, assets in Fortigent’s UMA at Schwab have grown by 50 percent and the number of accounts has increased by 40 percent.

“While we have continued to make significant investments in tools and services to help transitioning advisors, the most important part of our offering is the team of experienced people at Schwab who are dedicated to helping advisors think through each step of the process—from the actual decision, to setting up their business, to managing their growth,” said Clark.

For more information on Schwab’s resources, visit

New Resources for Independent Advisors Looking to Hire

One of the newer trends in independence is that more advisors are joining existing independent firms, and more independent firms are looking for ways to build their businesses by recruiting talented individuals from wirehouses and other financial firms. In 2009, 42 percent of all teams that chose to turn independent with Schwab joined an existing firm.

Schwab made a significant investment in 2009 to help existing advisory firms evaluate and act on this enormous growth opportunity. Schwab developed a number of tools and resources to help guide advisors through the complex process, including an “RIA Readiness Checklist,” the first step for advisors in evaluating whether to pursue recruiting an experienced financial professional to join their firms. The checklist includes questions and considerations in the areas of business strategy, firm culture and recruiting, investment philosophy, compensation, and legal considerations. Schwab’s more than 100 relationship managers who work with advisors were also trained to consult on these topics. Other materials developed in 2009 include a recruiting whitepaper, a worksheet to help advisors analyze firm and personal goals and a substantive guide to help advisors create a personalized recruiting pitch book. These materials were shared with more than 200 advisors during events that were held in 11 cities around the country to help advisors think through their strategy and to learn best practices from other firms.

About Charles Schwab

The Charles Schwab Corporation (Nasdaq:SCHW) is a leading provider of financial services, with more than 300 offices and 7.7 million client brokerage accounts, 1.5 million corporate retirement plan participants, 722,000 banking accounts, and $1.42 trillion in client assets as of December 31, 2009. Through its operating subsidiaries, the company provides a full range of securities brokerage, banking, money management and financial advisory services to individual investors and independent investment advisors. Charles Schwab & Co., Inc. (member SIPC,, and affiliates offer a complete range of investment services and products including an extensive selection of mutual funds; financial planning and investment advice; retirement plan and equity compensation plan services; referrals to independent fee-based investment advisors; and custodial, operational and trading support for independent, fee-based investment advisors through Schwab Advisor Services. The Charles Schwab Bank (member FDIC) provides banking and mortgage services and products. More information is available at (0110-0646)

Investment advisor firms are independent of and not affiliated with Schwab, and their employees and agents, including individuals named in the report, are not employees, agents or representatives of Schwab.

Third party firms are not affiliated with or employed by Schwab.

Past performance is not an indicator of future results.

The Investment Proposal Center ("IPC") is provided by Informa Investment Solutions, Inc. ("Informa"), an independent financial services firm and a wholly owned subsidiary of Informa Financial Information Inc. IPC is licensed from Informa by Charles Schwab & Co. Inc. ("Schwab"). Schwab and Informa are not affiliated. Information about each money manager ("MM") available through the IPC is assembled by Informa from information prepared by the MM. The information about mutual funds and exchange—traded funds available through the IPC is assembled by and is the proprietary information of Morningstar, Inc., an independent financial services firm ("Morningstar"). Through the IPC, Schwab merely is providing you with access to information assembled by Informa or Morningstar and is not itself providing this information.

Schwab does not endorse, recommend or provide advice with respect to Fortigent, LLC ("Fortigent"), Parametric, Fortigent’s UMA or any other TAMP. Schwab and Fortigent are not affiliated. The information above regarding Fortigent, Parametric and Fortigent’s UMA was provided by Fortigent and Schwab does not guarantee its accuracy. Fortigent is a registered trademark of Fortigent LLC.

Administrative Trustee Services are provided by the Personal Trust Services Division of Charles Schwab Bank, a federal savings association. Charles Schwab Bank’s Personal Trust Services Division serves as administrative trustee of trusts whose investments are managed by independent investment advisory firms that are named by the grantor or beneficiaries and that do business with Schwab Advisor Services. These advisory firms are not affiliated with The Charles Schwab Corporation, Charles Schwab Bank, Charles Schwab & Co., Inc., or any affiliates or subsidiaries. Schwab Advisor Services also provides custody, securities brokerage, trust accounting, and related back-office services to administrative trusts for which Charles Schwab Bank serves as an administrative trustee.


Charles Schwab
Lindsay Tiles, 415-667-0479
John McInerney, 212-508-9628

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