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A sometimes defensive Bernie Clark makes four points pertaining to Schwab's RIA custody business in an update to Wall Street

The overseer of Schwab RIAs explains the San Francisco giant's difficult-to-do-business-with reputation and the long rollout of SII

Author Brooke Southall August 26, 2013 at 5:24 AM
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Bernie Clark: I couldn't stress enough that if we didn't do well then our competitors would be right behind us.

Stephen Winks

Stephen Winks

August 27, 2013 — 12:25 AM

Bernie gets the big picture, but as an observer , not as a participant that drives innovation, but simply a reaction to it.

Schwab is defining itself here, not as a strategic collaborator but as a vendor of services separate and distinct from the core activities of the advisor.

This is neither good or bad, just agnostic.

For advisors to thrive they may need more engaged thought leadership which is actionable, which can only come from advisors who afford scale as early adopters.

Thus the shift in industry leadership from custodians to large RIAs who will leave a legacy of advancing industry redefining innovation.

Brent Broadeski, Ron Carson, Fielding Miller as large scale RIAs who are the early adopters will leave a legacy by advancing innovation and scale as practitioners. This goes far beyond the roll-up model that just focuses on the extrapolation of the brokerage business model where IARs sell advice as a product rather than treating advice as an expert prudent process that advisors manage in the client’s best interest.

This is an important distinction as the difference is professional standing and an in-depth understanding of advisory services, its processes, technology, work flow management, conflict management all of which are required for advisors to control their value proposition, cost structure, margins and professional standing.

It would be nice if Schwab were to create large scale institutionalized support for expert fiduciary standing, but it will keep its distance as that would trigger fiduciary liability by being prescriptive. Of course large scale RIAs have no fear of fiduciary duty and professional standing, thus the important leadership role they play in the industry’s evolution.


Mike Byrnes

Mike Byrnes

August 28, 2013 — 2:44 PM

It is interesting to see that 80% of net new assets are coming from organic growth — Mike Byrnes, President of Byrnes Consulting, LLC, www.byrnesconsulting.com

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Mentioned in this article:

Tiburon Strategic Advisors
Consulting Firm
Top Executive: Charles Roame

TD Ameritrade
Asset Custodian
Top Executive: Tom Nally

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