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Schwab Renames Private Client Offering

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What You Need to Know

  • Schwab Private Client is now Schwab Wealth Advisory.
  • The change is a signal Schwab wants to compete more broadly with a full-service offering, says Timothy Welsh of Nexus Strategy.

Charles Schwab has officially changed the name of its premier advisory solution that was started two decades ago from Schwab Private Client to Schwab Wealth Advisory.

The planned change, first announced by the firm June 16, became effective July 1, a company spokesperson said Thursday. The change was also reflected in a disclosure brochure posted on Schwab’s website Wednesday.

The name change was made to “better reflect the depth of wealth advisory experience, dedicated service, and ongoing enhancements to investing solutions delivered to its more than 70,000 households representing” about $146 billion in assets as of Dec. 31, Schwab said in June.

The change was “clearly a signal to the marketplace that Schwab wants to compete more broadly with a full-service offering, something they have never had before,” according to Timothy Welsh, CEO, president and founder of Nexus Strategy.

The news is “both good and bad — good for the company to take on the wirehouses more directly; bad for RIAs who will now have to defend what they do vs. what their custodian does,” Welsh told ThinkAdvisor by email on Thursday.

There is “more channel conflict for Schwab to manage, but after 20 years of doing so, I don’t think the big RIAs really worry all that much anymore,” he added. “However, for small RIAs, Schwab’s offering will prove challenging to their long-term sustainability.”

Offering a somewhat different take on Thursday, Andy Tasnady, managing partner of Tasnady Associates, told ThinkAdvisor: “The name change does exude a broader more inclusive feel (not just high end ‘Private Clients’). At the same time it also opens up the ‘Advisory’ aspect of their options to their historic self-directed client branding positioning. So it should be good for business in two ways.”

SPC was launched in spring 2002 to meet the needs of clients searching for “holistic investment management,” Schwab noted, explaining: “From its inception, the focus has been to provide investors with deep experience in investment management, dedicated service, and value.”

“Over the past 20 years, Schwab has continued to enhance the breadth and depth of the offer to provide a comprehensive wealth management solution with a personalized approach delivered by an experienced team — all backed by a Satisfaction Guarantee unique among competitive wealth advisory offers,” the company said.

There have been no changes to client service, relationships or cost associated with the name change, Schwab said, noting the annual fee for the program now starts at 0.80% of billable assets and the fee rate declines at higher asset levels.

Schwab Advisor Network, the referral network serving investors throughout the U.S. with referrals to independent RIAs, will continue to complement Schwab’s suite of advisory services, the firm also said.

SAN, which also started in 2002, now has 170 enrolled RIAs who provide customized investment management, financial planning, insurance, tax strategies and estate planning, depending on each client’s specific needs, according to Schwab.

The average SWA household now has more than $2 million enrolled in the solution, according to Schwab.

“The success of this program is evidenced by the tremendous growth we’ve seen over time,” Rick Wurster, president of Charles Schwab, said in a statement. “We’re incredibly proud that these clients have entrusted us with their financial lives and are relying on us to put the wealth they’ve attained to work for their futures and their families.”

SWA provides clients with a comprehensive wealth management strategy that the firm said includes “key aspects and stages of a client’s financial life, from investment management to financial planning, retirement, education planning, and more.”

It also provides a “personalized wealth management approach based on a client’s preferences, needs, and goals, led by a dedicated wealth advisor who coordinates with the client’s local branch financial consultant along with access to specialists in income generation, options, insurance, equity compensation, and estate planning,” according to Schwab.

Investors enrolled in the program also get invitations to exclusive events featuring nationally known speakers from various industries.

“As we enter our third decade of supporting clients’ wealth management needs, clients can expect to continue to benefit from our strengths across a range of advisory and investing capabilities including asset management, financial planning, digital innovation, and more — all tailored to their unique needs,” Wurster added.

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