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Charles Schwab Corp. has signed up three more franchisees for its independent-branch-services program, chief executive Walt Bettinger said during an analyst meeting yesterday.
“A couple others … are almost complete,” he said, adding the company wants to open 12 to 14 franchised branches this year.
Interest in the program has been “a bit overwhelming,” Mr. Bettinger said. “We have over 1,700 applications for this program. And what we've chosen to do is be very, very careful about the people that we bring to our independent branch system.”
Schwab opened its first franchised branch office in December at a location in Nashua, N.H.
“The first branch is well ahead of plan,” Mr. Bettinger said, adding, however: “I don't know that I would draw any conclusions from one branch.”
The company expects the new offices to open in the latter part of the first quarter or the second quarter, said Schwab spokesman Michael Cianfrocca.
Mr. Bettinger also touched on the legal fight Schwab is having with the Financial Industry Regulatory Authority Inc.
In a complaint filed against Schwab Feb.1, Finra claims Schwab's arbitration agreement wrongly includes a provision requiring investors to waive their rights to participate in class actions against the firm.
Schwab is asking a federal court in California for an expedited opinion on whether or not a recent Supreme Court decision lets the firm prevent class claims via an arbitration agreement.
“This is an issue between us and regulators, not Schwab and clients,” Mr. Bettinger said. “And we're particularly sensitive to the fact that we don't want any smaller clients to feel that they're under some obstruction or barrier to being able to file an arbitration claim.”
Schwab will reimburse arbitration filing fees to clients until the issue is resolved, Mr. Bettinger said.
