Schwab revamps offering for breakaway reps
The new offering includes a full rollout of a lending program for new advisers that Schwab has been running on a pilot basis.
Charles Schwab Corp. of San Francisco is rolling out an enhanced package of services for breakaway brokers.
The new offering, launched today, includes a full rollout of a lending program for new advisers that Schwab has been running on a pilot basis, and upgraded performance reporting and billing technology.
Breakaway reps who leave traditional brokerage firms to set up their own RIAs are a huge market for Schwab Institutional and other custodial firms.
But brokers leaving the confines of a wirehouse need more support than they have been getting, said Barnaby Grist, managing director of strategic business development for Schwab Institutional of San Francisco.
The lending program, available to reps with $75 million or more in assets under fee-based management, helps advisers finance a startup, Mr. Grist said.
Many new RIAs have no collateral and can’t get bank loans, he said.
Schwab doesn’t require collateral “because we know advisers bring over 90% of their clients and grow assets 30% in their first year,” Mr. Grist said.
Loan amounts range from $100,000 to $500,000.
The new technology offering converts Schwab’s PortfolioCenter software into a web-based program.
The back-office upgrade should reduce advisers’ need to have local staff manage technology, Mr. Grist said, and supports performance reporting across all assets.
The technology is a result of Schwab’s acquisition last year of Etelligent Consulting Inc. of Overland Park, Kan., Mr. Grist added.
The new package of services also includes an online tool that lets advisers design their own marketing materials, a turnkey 401(k) plan and arrangements with various office-service vendors.
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