Schwab Renames Private Client Offering

What You Need to Know

Schwab Private Client is now Schwab Wealth Advisory.
The change is a signal Schwab wants to compete more broadly with a full-service offering, says Timothy Welsh of Nexus Strategy.

Charles Schwab has officially changed the name of its premier advisory solution that was started two decades ago from Schwab Private Client to Schwab Wealth Advisory.

The planned change, first announced by the firm June 16, became effective July 1, a company spokesperson said Thursday. The change was also reflected in a disclosure brochure posted on Schwab’s website Wednesday.

The name change was made to “better reflect the depth of wealth advisory experience, dedicated service, and ongoing enhancements to investing solutions delivered to its more than 70,000 households representing” about $146 billion in assets as of Dec. 31, Schwab said in June.

The change was “clearly a signal to the marketplace that Schwab wants to compete more broadly with a full-service offering, something they have never had before,” according to Timothy Welsh, CEO, president and founder of Nexus Strategy.

The news is “both good and bad — good for the company to take on the wirehouses more directly; bad for RIAs who will now have to defend what they do vs. what their custodian does,” Welsh told ThinkAdvisor by email on Thursday.

There is “more channel conflict for Schwab to manage, but after 20 years of doing so, I don’t think the big RIAs really worry all that much anymore,” he added. “However, for small RIAs, Schwab’s offering will prove challenging to their long-term sustainability.”

Offering a somewhat different take on Thursday, Andy Tasnady, managing partner of Tasnady Associates, told ThinkAdvisor: “The name change does exude a broader more inclusive feel (not just high end ‘Private Clients’). At the same time it also opens up the ‘Advisory’ aspect of their options to their historic self-directed client branding positioning. So should be good for business in two ways.”

SPC was launched in spring 2002 to meet the needs of clients searching for “holistic investment management,” Schwab noted, explaining: “From its inception, the focus has been to provide investors with deep experience in investment management, dedicated service, and value.”

“Over the past 20 years, Schwab has continued to enhance the breadth and depth of the offer to provide a comprehensive wealth management solution with a personalized approach delivered by an experienced team — all backed by a Satisfaction Guarantee unique among competitive wealth advisory offers,” the company said.

There have been no changes to client service, relationships or cost associated with the name change, Schwab said, noting the annual fee for the program now starts at 0.80% of billable assets and the fee rate declines at higher asset levels.