Charles Schwab – Schwab Advisor Network® Program

Charles Schwab has been a predominant discount brokerage firm providing a wide array of investment services for do-it-yourself investors. In recent years Charles Schwab changed its business model to include providing investment management services to the professional advisor marketplace. Independent Registered Investment Advisors (RIA) need to establish custodial brokerage firm relationships to meet investment need of their clients. As a part of their business model, Schwab Advisor Network® was created to meet RIA investment advisory service needs including, trade execution, clearing, market maker, cashiering and portfolio accounting.

According to Charles Schwab marketing materials, “If you have complex wealth management needs and want to work with a local independent investment advisor, consider Schwab Advisor Network®. We’ll refer you to an advisor who can offer you specialized guidance and personalized attention.” What they promise is:

  • Access to experienced advisors;
  • Expertise across a broad range of specialties;
  • A customized referral; and
  • Comprehensive, personalized management.

Schwab Advisor Network® is promoted to retail customers with claims that it prescreened “approximately 200 independent advisory firms nationwide” and that all other advisors are only prescreened for criteria such as, “investment management experience, amount of assets managed, and professional education.” Sounds great, to the unknowing investor who might fully understand what is being represented. So who does an investor choose as their independent registered investment advisor?

Here is the important disclosure which might not seem important. Schwab Advisor Network® admits, “Hiring an advisor is an important step in meeting your financial goals.” No disagreement here. According to Charles Schwab, the RIAs who are available through the Schwab Advisor Network® are “not intended to be a recommendation of the firms on this list. Only you can decide whether a specific firm is right for you. Be sure to perform your own thorough research before selecting an advisor.” This is an important disclaimer which attempts to distance Charles Schwab from any investment losses at the hands of RIAs who mismanaged investment portfolios.

It is important to determine whether your investment portfolio has been properly managed by a registered investment advisor in a custodial account in Charles Schwab’s Advisor Network® based on your investment objectives, risk tolerances and investment time horizon.

Investors are advised to seek competent financial, tax and legal advice concerning the decisions they make with their investments. Klayman & Toskes, P.A. can provide you with a free consultation concerning any securities industry violations related to the handling of your investments accounts by a full-service brokerage firm or registered investment advisor.

Information contained on this webpage is for educational purposes only
and should not be considered legal advice.
No Information contained on this website creates an attorney-client relationship.