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Industry Spotlight > Advisors

Schwab to Close, Downsize Offices in 10 Cities

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Charles Schwab is giving thousands of employees a reprieve from a recently announced return-to-office mandate as it moves instead to shut U.S. offices in five cities and downsize in six others.

A Schwab spokesperson confirmed Friday that company offices will be closing Oct. 1 in Atlanta, San Antonio, San Diego, St. Louis and Tampa, and that the firm has told employees its offices are being reduced in size at single locations in Boston; Henderson, Nevada; Jersey City, New Jersey; and San Francisco; as well as at two spots in Chicago. The smaller locations will remain in place or be moved to nearby areas.

“In an effort to efficiently use resources to support our clients, our employees, and our stockholders, we have evaluated our real estate footprint,” the spokesperson said in a statement supplied to ThinkAdvisor Friday afternoon.

“We will close some of our smaller locations with modest levels of in-office attendance or reduce or move our footprint in others,” the spokesman explained. “There are no changes to our larger centers and corporate campuses or to our branch footprint.”

The spokesperson added: “There will be no impact to client service. Employees assigned to a closing location will move to full-time remote work and employees in a location that is reducing in size or moving will be eligible for remote work.”

See: Charles Schwab Sweeps 1 Million Clients Into Private Client Services

About 5% of Schwab’s staff are “assigned to locations that are closing and on a busy day less than 50% may physically be in one of these offices,” the spokesperson said.

In reporting on an internal memo shared with Schwab employees, Citywire reported on July 7 that the firm “cited low in-person attendance and a need to ‘efficiently use resources’ as reasons for reducing its real estate footprint.”

More Developments

Charles Schwab said July 10 that retail investor clients with more than $1 million in assets at the firm will be automatically enrolled into Schwab Private Client Services, while clients with $10 million and up will be enrolled in Schwab Private Wealth Services.

These clients will have access to a dedicated Schwab consultant responsible for their overall relationship with Schwab at no additional cost, according to a news release.

The consultants aim to help clients “manage their financial life,” choose the right level of advice or services, create a personalized financial plan, and connect them with Schwab’s wealth management specialists, the firm noted.

See: Do Schwab’s New HNW Services Threaten Advisors?

“These branded experiences underscore Schwab’s ability to meet the specific needs of our wealthier clients, but we are equally committed to ensuring that every client at Schwab receives a great experience, from those just getting started to those building wealth,” according to Jonathan Craig, head of investor services at Charles Schwab.

As of May 31, Schwab’s total client assets were $7.65 trillion, up 5% from May 2022 and flat compared to April 2023. Assets in Schwab’s retail business — Investor Services — stood at roughly $4 trillion as of March 31, while assets in the firm’s investment advisor business —  Advisor Services — were $3.6 trillion.

Through June 2023, the HNW and UHNW client segments have grown to represent more than two-thirds of the firm’s total retail client assets. Clients with more than $1 million at Schwab are have grown at a rate of more than 10% annually over the last five years, while clients with more than $10 million at the firm are growing at a rate of nearly 20%, according to the firm.

Schwab is expected to announce its second quarter earnings on Tuesday. Analysts expect its earnings per share for the period ending June 30 to be $0.75 — down 23% from a year ago —  and its revenues to be $4.6 billion, off Q2’22 by roughly 10%.

– Janet Levaux and John Manganaro contributed to this report.

A Charles Schwab location in New York. Photo: Bloomberg


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