Schwab Institutional Helps Pave Path for Financial Advisors Seeking Independence

Schwab Institutional Helps Pave Path for Financial Advisors
Seeking Independence
Webcast and Report Available to Financial Advisors 


SAN FRANCISCO, July 6  /PRNewswire-FirstCall/ -- Schwab Institutional, a
leading provider of custodial, operational and trading support for independent
fee-based investment advisors, today announced the release of a new Schwab
Marketing Knowledge Tools (MKT) industry report that highlights the
opportunities available for financial advisors interested in becoming
independent. Schwab Institutional teamed up with HNW, Inc., with data provided
by Moss Adams LLP, to produce the report examining the business models and
compensation structures available to advisors considering independence, as well
as the reasons why many high-net-worth clients prefer independent advice.

The report, entitled Going Independent: Why Many Successful Financial Advisors
are Starting or Joining Independent Firms, investigates the benefits and
factors influencing advisors considering the independent model, including:

  * Desire to have a more client-focused rather than product-centric
    practice
  * Ability to build equity in and manage a fee-based business
  * Potential to keep more of the revenue earned
  * Reduction of conflicts of interest
  * Access to a wider range of products for their clients



The report also closely examines the various independent practice models and
the associated economics of each.  The economic analysis is based on data from
600 independent advisors from the 2004 FPA Financial Performance Study of
Financial Advisory Practices and other relevant industry reports. Based on the
report, the Registered Independent Advisor (RIA) model can yield the most
income for advisors, as well as provide the most independence, as compared to
the broker and independent broker dealer (IBD) models.

  Two of the most important findings contained in the report include:

  * The continued embrace of independent advisors by high-net-worth
    investors
    -- Between 2001 and 2004, RIAs have overtaken wirehouses as the advisors
       of choice among high-net-worth investors, with 47.5% of
       high-net-worth households relying on RIAs compared to 30% in 2001;
       during that same period wirehouse brokers lost almost 10% market
       share, dropping from 40% to 30%(1)

  * A comparison of the average advisor compensation for each of the
    different advisor models
    -- For example, for advisors at the $1,000,000 production level, an RIA
       would realize $346,000 in total income, whereas a wirehouse broker
       would realize $275,000, and an IBD representative would realize
       $298,900



"Our goal is to provide advisors considering independence with the information
they need to make an educated decision," said Michelle Crethar, vice president
of Schwab Institutional. "As high-net-worth investors increasingly turn to
independent advisors for unbiased financial advice, Schwab Institutional is
committed to helping independent advisors with all aspects of their business,
from starting a firm to managing and growing their business."

Advisors interested in learning more about independence can request a copy of
the report by sending an email to  or calling Schwab Institutional at
1-866-855-8819.

To help further educate financial advisors on the opportunities available,
Schwab Institutional's Jon Beatty, senior divisional sales manager, hosted a
webcast on June 1st. The webcast featured Len Costa, senior vice president and
editorial director of HNW, Inc., and Colin Higgins, president and co-founder of
The Golub Group, an independent investment advisory firm formed by Mr. Higgins
and his partner Michael Golub. Mr. Costa's presentation detailed the growth of
the independent advisor industry, the economics of running an independent
practice and why independent advisors are well positioned to serve the needs of
high-net-worth clients. Mr. Higgins shared his firsthand experience in forming
an independent advisory firm, including the due diligence and transition
process, as well as the challenges and rewards of running an independent
practice.

Schwab Institutional has made the recorded replay of the webcast available to
interested advisors and plans to host more webcasts in the near future. The
webcast replay is available at http://disclosure.mshow.com/SchwabShow90 .

"The webcast was met with enthusiastic responses from advisors all over the
country, who had dozens of questions on the logistics of starting a new firm,"
said Crethar.  "Participants hailed from major wirehouses, banks, independent
broker dealers and regional broker dealers. Combined, they manage more than
three billion dollars."

Schwab Institutional has helped many investment professionals start their own
independent firm or join an existing one through its suite of comprehensive
solutions. Schwab Institutional seeks to help advisors achieve a smooth
transition by providing information about setting up their business, portfolio
management and trading tools, marketing and business development services,
back-office support, and compliance information from third-party professionals.

Information on turning independent and setting up an independent advisory firm,
is available at http://www.aboutschwabinstitutional.com/ .

About Schwab Institutional

Schwab Institutional, a division of Charles Schwab & Co. Inc., is a leading
provider of custodial, operational and trading support for independent
fee-based investment advisors. Client assets custodied with Schwab
Institutional increased 16 percent to $352 billion between March 31, 2004 and
March 31, 2005. These assets, managed by the approximately 5,000 independent
advisor firms Schwab Institutional serves, represent approximately one-third of
total customer assets custodied with The Charles Schwab Corporation as of March
31, 2005.

About Charles Schwab

The Charles Schwab Corporation (NYSE / Nasdaq: SCH), through its operating
subsidiaries, provides securities brokerage and financial services to
individual investors and the independent investment advisors who work with
them. With over 7 million individual investor accounts and more than $1
trillion in client assets, The Charles Schwab Corporation is one of the
nation's largest financial services firms. Its subsidiary Charles Schwab & Co.,
Inc. (member SIPC) provides a complete range of investment services and
products, including an extensive selection of mutual funds; financial planning
and investment advice; retirement plans; referrals to independent fee-based
investment advisors; and custodial, operational and trading support for
independent fee-based investment advisors through its Schwab Institutional
division. Its subsidiary Charles Schwab Bank (member FDIC) provides banking and
mortgage services and products. The corporation's other operating subsidiaries
include U.S. Trust Corporation (member FDIC) and CyberTrader(R), Inc. (member
SIPC). These companies' Web sites can be reached at http://www.schwab.com/,
http://www.schwabbank.com/, http://www.ustrust.com/, and
http://www.cybertrader.com/.

(1) Spectrum, Schwab Business Strategy Group, Cerulli NFO 

DATASOURCE: Charles Schwab



CONTACT:  Lindsay Tiles of Charles Schwab, [phone], or

; or Tyler Bradford of Makovsky & Co.,

[phone], or 



Web site:  http://www.schwab.com/ 

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