As The Charles Schwab Corp. officially begins promoting its new Independent Branch Services franchise program, observers wonder how the firm will pull off the ambitious plan to expand its footprint with independent contractors.
The company is recruiting advisers to buy Schwab franchises and insists it wants proven performers to run smaller outlets in areas where it has no existing branches.
But many advisers see little reason why someone would give up a successful practice to run a Schwab office.
What’s more, Schwab plans to split revenue fifty-fifty with established franchisees, who must cover the two biggest expense items for any advisory practice — rent and salaries. That strikes many as a tough sell in a market where independent RIAs and brokers keep most, if not all, of their revenue-before-expenses.