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Schwab Smoothes the Road to Independence

By James J. Green

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Schwab Institutional announced on June 12 a multipronged platform–with some existing planks, and some newly laid ones–to ease the transition process for brokers who wish to become independent RIAs. John Furey, director of strategic business development at SI, says Schwab Business Start-up Solutions (SBSS) packages together all the services and discounts available to so-called breakaway brokers, some 300 of whom have made the transition from mostly wirehouses to RIA status with Schwab over the past few years. In 2007, 114 advisors moved $9.2 billion in client assets to SI, but 2008 looks to be even better, Furey says, noting that those full-year amounts will be matched by mid-year 2008.

The package includes a Web-based performance reporting tool that combines Schwab Performance Technologies’ PortfolioCenter software with that of Etelligent Consulting, the back-office outsource provider acquired by Schwab in January 2008.

SBSS includes an online marketing tool to help build brand for these breakaways, and Furey specifically mentioned a “Lights On” program through which advisors build marketing plans with one of four national marketing firms that are partners in SI’s GrowthPoint practice management program. Such marketing help can save new advisors “two to three months and tens of thousands of dollars” in startup costs, according to Furey.

Another feature in the package is a program to help new advisors find office space, and even furniture, and get significant discounts on other business services provided by firms like Laserfiche and UPS. There is an HR program offered through TriNet under which advisors who custody with Schwab gain access to a host of “scaleable, corporate-like benefits,” says Furey, including healthcare and a 401(k) platform. Finally, a program called Schwab Institutional Business Loan (SIBL) makes advisors who custody a minimum of $75 million in client assets eligible for startup financing for their new firms through loans made by Schwab Bank.