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September 19, 2011 at 10:23 AM
In an interview with AdvisorOne following his speech at FPA Experience 2011 on Friday in San Diego, Bernie Clark spoke of Charles Schwab’s franchise expansion plans, how advisors can support their clients in volatile times and on whether there will be a greater flow of brokers out of the wirehouses and into the independent channel next year.
As for Schwab’s plans to create franchise-like branches, upon which there was some concern among its affiliated RIAs when the plan was first broached earlier this year, Clark (left) downplayed the possible competition to advisors. “This is a branch expansion,” he explained, with the new franchises situated at least 75 miles from existing Schwab (SCHW) retail branches.
The advisors in those franchise operations will cater to the mass affluent, he said, providing centralized, packaged investment solutions. The franchise sites, he vowed, will offer to RIAs only “the same amount of competition” as do existing Schwab retail branches.
As for the current state of the economy and markets, marked by volatility and a lack of investor confidence, Clark said advisors who can boast of consistency and depth in their relationships with those they serve are “lending their confidence” to clients.
Asked whether he expected a deluge of wirehouse brokers to break away following the expiration of their contracts with the big Wall Street firms in 2012 and 2013, Clark was cautious. “There will be anniversaries in 2012,” he said, referring to those expirations, but rather than a sudden outflux, he expects a “consistent flow” of brokers going independent.
