MutualFundWire.com
The insiders' edge for 40 Act industry executives!
an InvestmentWires' Publication
an InvestmentWires' Publication
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MutualFundWire.com
The insiders' edge for 40 Act industry executives!
an InvestmentWires' Publication |
|
Tuesday, November 14, 2000 Advisors Seek Custodial Options Schwab's competitors are seeing signs of unrest among Schwab's custodial clients. The recent departure of high-net-worth handler Harold Evensky to Fidelity may signal a steady drift of defections to competing custodians. Schwab has been alienating at least some its AdvisorSource clients by providing competing advisory services at its branches. Furthermore, through its referral program, Schwab now provides customer referrals both to the advisor who has paid for that privilege and to US Trust. "I think it's crazy," said a Schwab client and member of AdvisorSource with $500 million under management. He now has $100 million custodied with Datalynx, and he sees others doing the same. He commented, "I think you're going to see a paradigm shift. I think you're going to see a lot of larger advisors leaving Schwab." Schwab's competitors are happy to pick up the extra business. "We have been approached by more high-end Schwab users than ever before," said Skip Schweiss, vice president of First Trust who heads DataLynx. "We have had no fewer than ten high-end -- that's $100 million plus -- users asking what we can do for them. They're saying, 'I've finally had it. I need to find a different service provider.'," Schweiss told MutualFundWire.com. Schweiss cited Schwab's "competitive stance" as the reason for this attitude, describing the US Trust merger as "the straw that broke the camel's back." Datalynx presently handles $5 billion in assets for 300 clients. TD Waterhouse has also seen an increase in inquiries from Schwab customers. Waterhouse reports that many clients previously aligned with Schwab have opened new accounts with hopes that advisors will transfer existing accounts down the road. "We expect to see some bulk transfers over the next year," said Tom Bradley, president of Waterhouse's Institutional Services. Bradley told MutualFundWire.com that he has also been approached by many advisors in the $100 million and over category. Waterhouse has taken steps to ease the process of transferring assets with its "new business integration team." "It's sort of a SWAT team, coming into the advisor's office and helping to fill out all the paperwork," described Bradley. Waterhouse presently handles $15 billion in assets, with aspirations of increasing that number to $30 billion by bringing on heavy-hitting advisors. The firm is focusing on this strategy, rather than adding many new clients to its present complement of 3,000. Schwab officials say that the broker is committed to the advisor service and that it continues to grow its business. "Schwab has never been more committed to advisors and there is a number of things we are doing on behalf of advisors and one of those things is US Trust," said Schwab spokesman Lance Berg. US Trust, Berg explained, brings the potential of equity research, private banking, and unbundled trust services. Schwab will be investing $54 million in institutionally-focused technology, some of which will aid advisor efficiency. Berg denied claims of client attrition saying, "We've had growth, thirty-five percent annualized growth, and we've continued to see that growth. We attribute that to the servicing of our clients." Printed from: MFWire.com/story.asp?s=25974 Copyright 2000, InvestmentWires, Inc. All Rights Reserved |