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Charles Schwab’s Advisor Services Focus on Customized Solutions



Advisor Services division

As of June 30, 2015, Charles Schwab’s (SCHW) Advisor Services division reported total client assets of $1.08 trillion, which is 5.14% higher than the prior year’s quarter and 0.3% higher than the previous quarter. Clients in the division added new assets totaling $10.0 billion. The Advisor Services division’s assets make up 45% of Charles Schwab’s total client assets. The company provides custodial, trading, and support services to independent investment advisors, or IAs, retirement business services to independent retirement plan advisors, and record keepers under its Advisor Services division.

Charles Schwab’s Advisor Services segment is focusing mainly on its online or virtual advisory programs. These programs have the potential for high growth in the long term.

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New initiatives

In 2Q15, Charles Schwab’s Advisor Services launched Institutional Intelligent Portfolios, an automated investment management platform for RIAs. The platform allows advisors to create their own customized portfolios from over 450 exchange-traded funds, or ETFs, backed by 28 different asset classes.

Charles Schwab is also investing in educating and enhancing its relationship with advisors. The company held its annual “Explore” conference to discuss new technologies, offerings such as Institutional Intelligent Portfolios, and the Schwab Executive Leadership Program, which aims to help in developing independent advisor firm management.

Charles Schwab also expanded its Schwab OpenView Gateway to include integration with Orion Advisor Services and Redtail Technology. The company is striving to increase advisor efficiency by adopting enhancements to core custodial platforms, web and mobile solutions, and Institutional Intelligent Portfolios. Offerings such as Portfolio Connect will also help clients with advanced portfolio management solutions.

Here’s how a few of the firm’s peers in the brokerage industry fared in terms of net profits in the last 12 months:

  • Interactive Brokers (IBKR) posted $459 million.
  • TD Ameritrade Holding (AMTD) posted $787 million.
  • E*TRADE (ETFC) posted $293 million.

Together, these companies make up 10.80% of the iShares U.S. Broker-Dealers ETF (IAI).


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