Podcast Center
Video Center
Webcasts
Resource Center
Events
By 
April 10, 2018 at 10:19 AM
Back in the early 1980s, almost all independent advisors were former brokers or insurance agents, or both. And, even though they knew they would make less money, they went independent mostly because they felt it would enable them to provide better service to their clients.
This financial step backward was so dramatic and so widely known that some brokers used to refer to the Financial Planning Association’s forerunner, the International Association for Financial Planning, as the “International Association of Failed Producers.”
As a result, I developed a soft spot for independent advisors that’s lasted all these years. But the world moves in mysterious ways, and two things happened in the mid-1980s. The stock market that had been wallowing since the early 1970s took off, and Charles Schwab & Co. launched its financial advisor services division.
With the stock market rebounding, investors turned their attention away from tangible assets (gold, real estate and oil & gas) toward stocks and bonds. And, Schwab responded with FAS, and changed forever changed the independent advisory business.
Financial advisor services enabled independent advisors whose clients opened Schwab accounts to have their quarterly asset management fees deducted from their accounts and paid directly to their advisors. This eliminated the need for advisors to bill clients every quarter and allowed them to direct their client accounts — essentially moving the independent advisory industry into the asset management business, and away from product sales.
