Incoming Schwab CEO sees room to expand advisor business

By Andrew Welsch, Reporter, Barron's

“The advisor services business is a critical part of our company and our growth,” Rick Wurster, president and incoming CEO of Schwab, tells Barron’s. “It represents half of our assets and more than that in terms of our net new assets.”

Wurster chalks up the firm’s success to “winning in the advisor marketplace and also RIAs winning more clients in the marketplace.”

The company’s nearly $10 trillion in assets are split roughly evenly between retail investors and advisors. For the 15,000 RIAs that Schwab serves, the company provides a range of services: custody of client assets, technology, trading, banking, and more. 

Independent advisors are a key clientele for Schwab; as they grow their businesses, it helps fuel Schwab’s growth, too. For the first nine months of this year, Schwab raked in $252 billion in core net new assets, $142 billion of which came via the company’s advisor services unit, according to the company’s third-quarter earnings report. Net new assets is a key metric stock analysts track to keep tabs on Schwab’s growth.

Jon Beatty, head of advisor services at Schwab, says the RIA model is winning in the wealth management industry. Clients prefer to work with independent advisors and there has been an ongoing exodus of large advisor teams from national brokerages such as Merrill Lynch and Morgan Stanley to the RIA sector. 

Beatty thinks RIA growth will accelerate. “You haven’t seen anything yet,” he says. “There is $30 trillion outside this industry and those are investors we believe are underserved.”

Wurster and Beatty spoke with Barron’s ahead of Schwab’s annual IMPACT^® conference for RIAs, one of the industry’s largest such events. The company anticipates it will host 4,500 attendees in San Francisco next week.

Last year, the company hit some bumps along its journey to a bigger Schwab. Some former TD Ameritrade advisors and customers left ahead of a planned transition to Schwab’s platform (the company bought its former rival in 2020). Schwab has said attrition was within expectations and it has since returned to asset-gathering form. For the third quarter, the company hauled in $90.8 billion in net new client assets—almost double what it recorded for the same period last year, according to the company’s earnings report. Client assets were up 27% year over year due to a surge in new assets and market appreciation.

The TD Ameritrade integration was a massive undertaking. Schwab migrated advisors and customers in five groups, representing approximately $1.9 trillion in client assets across more than 17 million client accounts, including 7,000 RIAs, according to the company.

That isn’t the only change for advisors: In late 2025, Schwab is retiring its white label robo-advisor for RIAs and transitioning those customers to iRebal^®, the company’s rebalancing software. The change doesn’t affect Schwab’s robo-advisor for retail investors.

“We are in essence retiring an older ecosystem for a more modern ecosystem,” Beatty says. “We are taking a measured approach to help advisors make that transition. We believe that iRebal^® and the model market center will be better than what we can do with the legacy institutional platform.”

About 700 advisors used the white-label robo, with the majority serving fewer than 100 of their accounts, according to Schwab. About 5,000 advisors use iRebal^®.

The model market center provides hundreds of model portfolios from asset managers at no additional cost to advisors, according to Schwab. It also integrates with iRebal^®. Advisors can create blended models and custom portfolios.

At this year’s IMPACT^® conference, Wurster and Beatty say they will underscore the company’s commitment to its RIA clients. “We see more opportunities to work with advisors through our bank, our alternative investments platform, iRebal^®, and model market center,” Beatty says. 

The company is also looking for ways to make advisors’ jobs easier, the executives say. “One way we can grow is to do more for each advisor,” Wurster says, pointing to Schwab’s lending capabilities as an area that the company has been investing in and improving. For instance, pledged-asset lines have gone fully digital and are executed much more quickly as a result. Beatty says Schwab can execute on a lending request in as little as 12 hours.

Wurster also reiterated Schwab’s commitment to not charging custody fees. “We’re committed to having the most value in the industry. That means today no custody fees.”