Comments on: Is anyone else confused? http://wealthfly.com/blog/2007/02/07/is-anyone-else-confused/ A blog for investment advisors, brokers and financial planners. Tue, 06 Jan 2009 14:12:26 +0000 http://wordpress.org/?v=2.3.3 By: Matt Abar http://wealthfly.com/blog/2007/02/07/is-anyone-else-confused/#comment-40 Matt Abar Wed, 07 Feb 2007 23:50:03 +0000 http://wealthfly.com/blog/2007/02/07/is-anyone-else-confused/#comment-40 I don't think we see this issue differently. I think Schwab is, at best, sending conflicting signals to their RIAs. The conflict stems from a struggle at the executive level about whether they want to manage all accounts directly, or whether they'll farm out the client relationship and accept a smaller cut of the profits. Schwab Institutional does a great job with advisors when they're not stepped on by the executives. That being said, I think they're much more interested in the >$1 billion RIAs, but who wouldn't be? Conflicting signals aside, I think "loans for breakaway brokers" is a great marketing idea. Schwab positions themselves as *the* custodian for those high-end brokers with the potential to grow into the $1 billion firms Schwab wants as clients. At the cost of some relatively low-risk loans. I don’t think we see this issue differently. I think Schwab is, at best, sending conflicting signals to their RIAs. The conflict stems from a struggle at the executive level about whether they want to manage all accounts directly, or whether they’ll farm out the client relationship and accept a smaller cut of the profits.

Schwab Institutional does a great job with advisors when they’re not stepped on by the executives. That being said, I think they’re much more interested in the >$1 billion RIAs, but who wouldn’t be?

Conflicting signals aside, I think “loans for breakaway brokers” is a great marketing idea. Schwab positions themselves as *the* custodian for those high-end brokers with the potential to grow into the $1 billion firms Schwab wants as clients. At the cost of some relatively low-risk loans.

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