If Charles Schwab's latest earnings are any guide, the current mood in the market is ideal for advisors.
On one hand, Schwab reports that the amount of money that its clients have allocated to cash is now lower than it was before the credit crunch.
That in itself is an extraordinary bit of news after years of advisors wondering whether the massive flight to the market sidelines would ever end.
Furthermore, Schwab notes that about $800 billion of the $1.65 trillion currently on its platform is in some form of advisory relationship.
That means 16% growth for the giant clearing firm's piece of the advisory channel over the last year. Compare that to anemic 1% growth for its overall AUM, and you're looking at a retail investment environment where only the advisory side is really growing.
This comes through in Schwab's new account creation numbers. As far as the discount brokerage is concerned, Schwab only added 37,000 accounts over the last quarter -- that's 29% fewer than it added in 1Q 2010.
Are there simply no more new self-directed investors out there to woo to the platform?
At this rate, advisory services will be a bigger piece of Schwab's overall business than its traditional discount brokerage operation by 2013.