Are Schwab and Fidelity Competing With Advisors?
Your custodian competes with you for high net worth clients and it’s getting worse. These two articles should send a chill down your spine:
Schwab and Fidelity—the two biggest providers of custodial services to independent investment advisors—are consolidating their direct-to-investor business at the expense of their independent financial advisors. Schwab is dramatically curtailing their investor referral program:
“Yes, there will be fewer advisers in the [referral] program to enable [Schwab branches] to forge deeper, more productive relationships at the local level,” [a Schwab spokesperson] said.
“Schwab Retail and Schwab Institutional had a battle, and Schwab Retail won,” [said an adviser privy to Schwab corporate political maneuvering]
On top of it all, TD Waterhouse was acquired earlier this year. While the TD Waterhouse/Ameritrade merger isn’t inherently bad, corporate mergers often don’t end well for our independent advisor community. At the very least, it throws a cloud of uncertainty over the #3 advisor custodian.
What’s an independent advisor/planner to do?
WealthFly » Schwab unloads US Trust Corp said,
November 28, 2006 at 12:25 pm
[…] In a prior post, I talked about Schwab chucking advisors from their referral program. But any advisor lucky enough to still be in the program is in for some good news, Schwab just unloaded US Trust Corp to Bank of America for $3 billion. This gives Schwab one remaining channel for high net worth clients—independent RIAs. […]