Eyebrows throughout the industry are still raised at the idea of Charles Schwab adding independent broker offices into its existing network of in-house branches and RIA affiliates.
The premise, first raised about six weeks ago, is that Schwab wants to break from the "script" that drives business at its 300-branch network by filling new offices with independent reps.
Even in theory, the idea seems a little bizarre to industry observers from legendary analyst Brad Hintz on down.
While details are scarce, the new offices would probably cater to a slightly more upscale market than Schwab's traditional execution-only clientele and so will likely offer some form of "financial planning," portfolio management, and other value-added service: investment advice.
This, in turn, makes Schwab a direct competitor for the members of the mass affluent audience that many of its 6,000 RIA affiliates fight so hard to capture.
When the deal was announced, Schwab promised that the RIAs were safe. But six weeks later, we just don't know how that's going to happen.
And in the meantime, RIAs are wondering whether adding a service tier between them and the discount brokerage operation will only dilute their value-added brands.