Schwab Seeks to Reassure RIAs as Wealth Advisory Unit Grows

"So that's how much we believe in the RIA business model that we would refer our own retail clients at the scale that we do every year for advisors," he said.

Beatty suggested that RIAs contact him if they believe that Schwab Wealth Advisory is competing with their businesses.

"At Schwab we are passionate about serving all clients, whether those are clients that come to us through retirement plans and workplace business, clients that come to us via advisors in our advisor business and those clients that come to us in the retail channel, directly to Schwab," Beatty said.

"And as we often say, we see the business through our clients' eyes. And hopefully today you're hearing our passion for serving advisors. And I would say that permeates the whole company in a one Schwab view. But at the same time, we have to be passionate about serving our retail clients," he said.

Schwab responds to what it hears from retail clients, "and investors have been asking everybody for more help and advice. And we will respond to that in the marketplace to meet our clients in their time of need with the offers that they are asking for, whether that's directly with us or as we support advisors, or again through the workplace business," Beatty added.

Some market players suggested recently that Schwab is positioning its retail business to compete against the RIAs it serves, based on Schwab Wealth Advisory's moves to expand certain local offices.

Earlier this month, Neesha Hathi, who heads wealth and advice solutions at Schwab, told institutional investors that Schwab Wealth Advisory has expanded offices with wealth advisors to 20 affluent markets from four locations, and plans to reach 30 markets by year-end. She also noted that quarterly asset flows into Schwab Wealth Advisory are about triple what they were 18 months ago, that the business hired about 200 advisors last year and that it continues at that pace in 2026.

The market expansion "is big news given so many RIAs are clients of Schwab and now it will be competing w them," Bloomberg senior ETF analyst Eric Balchunas posted on X this week.

He noted that Schwab charges relatively low fees for full service.

A Schwab spokesperson told ThinkAdvisor by email Friday that there are no Schwab Wealth Advisory branches.

"Schwab's retail branches are client-facing locations staffed by financial consultants and branch teams members who serve clients face-to-face on a daily basis," the spokesperson said. "They continue to operate the same local branch network model that they have for decades."

Schwab Wealth Advisory is Schwab's full-service wealth management offer for retail clients, the spokesperson noted. The wealth advisors who serve these clients are located in regular office locations, not branches.

"The reason for that in-market presence is so that wealth advisors can strengthen regional connectivity with Schwab's financial consultants that they partner with and retail clients in those markets. Wealth advisors mostly meet with clients virtually, as they always have, and in partnership with branch financial consultants," the spokesperson said.

It's not the first time that Schwab has fielded concerns that its retail business competes with its advisor-clients. CEO Rick Wurster said in a podcast in March that the company doesn't want to compete with RIAs. Schwab wants to help advisors grow and will stand down in preference to the advisor if a conflict does arise, he said.

This question goes back at least to 2023, when Schwab announced it would automatically enroll retail clients with at least $10 million in assets into its private wealth services.

Schwab's Beatty this week, however, cited a "$37 trillion opportunity out there for all of us," adding, "We rarely bump into each other in the marketplace. There is so much wealth in this country, managed wealth, not even do-it-yourself for wealth. That is looking for the fiduciary model from RIAs. And that's why we want to extend that model to more investors who need it through these 16,000 RIAs that we work with today."

Beatty added that Schwab Wealth Advisory has operated for over a decade and "is well utilized across our vast branch network. ... Financial consultants refer their clients in their time of need when they ask for more help to the Schwab Wealth Advisory business model, as they do sometimes to the Schwab Advisor network."

Schwab, he added, believes in "powering all channels" to give investors options. "We often say when we're with clients, whether it's on stage or personally or in small groups, feel free to email me anytime you feel like you're in a competitive position with our retail business model. In the last 12 months I've gotten one email and we resolved it in about 15 minutes.

"So this is a huge opportunity in the marketplace for us and we will continue to be transparent with our advisors on how we deliver advice within our retail business and how it also couples up with our advisor business at the same time," Beatty said.