Being an RIA who custodies at Schwab has always been a crapshoot. Their custody services are great but RIAs must feel like they’re back in middle school and Schwab is the popular girl. She asks you to be her boyfriend on the way to first period, breaks up with you before recess, only to get back together after lunch.

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. Why is this good? It gives Schwab only one remaining channel for high net worth clients—independent RIAs.

The article says Schwab traded their trust capability for a formidable “war chest” and the price paid by Bank of America was “shocking”. It implies the deal was driven more from Schwab being enamored by the $3 billion than any altruism toward RIAs.

Regardless of the reason for the sale, Schwab reps are sure to benefit:

[RIAs], which have a combined $470 billion under custody with Schwab Institutional, are poised to capture the lion’s share of assets from families that come to Schwab looking for full wealth management capabilities…

“Schwab advisers can expect to reap the referrals that flowed to U.S. Trust in past years. This amounted to about $1 billion per year for a total of $6 billion as of June 30.”