Registered Investment Adviser Firms
Schwab's success depends heavily on the success of its independent investment adviser firms. Schwab serves roughly 5,000 independent advisers within its network. Most independent adviser firms are not affiliated with any brokerage firm, are not managed by a brokerage firm, and work independently from the brokerage firm, as adviser firms offer investment services to individuals or businesses. These adviser firms are generally regulated by state/local government or by the federal government and are also governed by the basic principles similar to that of a broker and yet different when rendering objective investment advice. Schwab was the first online discount brokers in the industry and has maintained its simple platform with simple tools for the novice trader.
In 2005, the headline of a newspaper for financial advisers read Schwab Battles for Wirehouse Assets. The article announced a new strategy of shifting more accounts from the brokerage firms and transitioning more brokers from the "brokerage world" into registered investment advisers.
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