It looks like Schwab is not wasting time in opening franchises with independent contractors. In fact, the San Francisco based broker is making five-year deals with dozens of financial advisors, and hopes to have between 5 and 10 opened by year’s end.
According to RIABiz, Schwab has received interest from more than 100 advisors and plans to have serious negotiations at the end of this month. Franchise owners will pay Schwab startup fees ranging from $25,000 to $50,000.
The gain will be access to Schwab’s technology support and services as well as revenue sharing and corporate support. Interestingly enough, they’re steering clear of Schwab employees and are hoping to nab seasoned financial leaders from wirehouses, independent RIAs and advisors affiliated with IBDs.
Nobody can know for sure whether Schwab’s franchise plans will work; it’s a risk given the regulatory uncertainty at this time. The one thing you can bet on…the industry will be watching with interest.