More on Migration

The Schwab Advisor Services executive in charge of its Advisors Turning Independent (ATI) initiative, Barnaby Grist, said that 112 wirehouse teams joined Schwab this year through August, a 40% increase over 2008. In August Schwab released a new white paper for potential breakaways that includes a worksheet that favorably compares the compensation benefits of running an RIA firm versus accepting a forgivable loan from a wirehouse. It concludes that owners of successful RIA firms can earn “69% to 73% net compensation, or owner’s income plus profit, less expenses for non-owner professional salaries,” and that the “average RIA owner typically earns 60% to 65% net compensation.”

However, in an interview, Grist warned against assuming that the wirehouses are at death’s door. “Wirehouses are big wounded bears,” he said during the mid-September Schwab Impact conference, “and while flailing, they can still do some damage.”