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Schwab On the Hunt for Smaller Wirehouse Breakaway FAs

By Crucial Clips     March 13, 2020
The following text is a transcript of a portion of a speaker's presentation made at an industry conference or during an interview. This transcript solely represents the view of the individual who spoke, and not the view of Financial Advisor IQ or any other group.
Source: FA-IQ, Feb. 26, 2020 

MRINALINI KRISHNA, REPORTER, FINANCIAL ADVISOR IQ: Good morning. I’m Mrinalini Krishna, reporter for Financial Advisor IQ. And with me today are Bernard Clark and Tom Bradley from Schwab Advisor Services. Tom, you joined Schwab Advisor Services recently to focus on some of the smaller RIAs. What are some of the growth opportunities that you see for that business in this year and going forward?

TOM BRADLEY, SVP, SCHWAB ADVISOR SERVICES: So we see tremendous growth opportunities in the advisors that manage — we call it our core group — they manage up to $100 million on our platform. And we have a few critical things tied to our strategy. One is to create more of those advisors, so to encourage breakaways, and to leverage our transition team services to encourage others and give them the confidence that they need to break away and to come out of a wirehouse, for example, or an independent broker-dealer and join Schwab.

So that’s number one. Number two, we have a strategy around providing them with consulting services to help them run more efficient and effective businesses so that they can grow their client base faster. That’s great for them and great for us as well.

And then a third thing that we are looking at doing is refining how we make introductions of these smaller advisors to larger advisors. And not all advisors want to do that. Some want to remain independent. But some of those folks may be interested in joining larger firms, like half a million dollar firms.

MRINALINI KRISHNA: So you mentioned making introductions of smaller advisors with some of the larger advisors. And the industry is going to get hit with this wave of having to succession plan for advisors that don’t really have one. Are you seeing a lot of interest in that kind of matchmaking for Schwab that has grown over the past few years? And do you see that grow up?

TOM BRADLEY: Well, we actually have a platform today to do matchmaking. But it’s a little lopsided. They were all buyers on the platform.

But we do see interest. I think the key here is in developing relationships between the groups. So it’s kind of hard — we found this — it’s difficult to do it online. And we need to find the right way to make the proper introductions, so that advisors can get to know each other and develop relationships, and make a determination as to whether or not they’d like to join forces.

MRINALINI KRISHNA: And have you seen an increase in those deals going in the last past one or two years, ever since succession planning’s become like a buzzword?

BERNARD CLARK, HEAD OF SCHWAB ADVISOR SERVICES: You know, the number of deals in totality has been quite similar. The size of the deals is what’s a tiny bit interesting. I mean, most of the deals happening are in the billion dollar space. We think that’s going to stretch itself down a little into the smaller firms, as I think more cost enters into it, more scale, more differentiation challenge. And we’ll probably see some more deals happening in that space.

MRINALINI KRISHNA: Thank you for being with us here today.


TOM BRADLEY: Thank you for having us.

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Tags:  Finding and winning new clients , Client retention , Staffing and recruiting , Behavioral finance , Schwab Advisor Services

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