Schwab apologizes to RIA clients for marketing letter gaffe

Bernie Clark, head of Schwab Advisor Services, apologized last week to the firm's RIA clients, expressing regret for a marketing piece sent to advisers' clients who sponsor Schwab-held retirement plans
OCT 17, 2011
Bernie Clark, head of Schwab Advisor Services, apologized last week to the firm's RIA clients, expressing regret for a marketing piece sent to advisers' clients who sponsor Schwab-held retirement plans. The original letter, part of a package sent Aug. 9, advises plan sponsors that Schwab will be adding two managed-account programs to retirement plans held at the firm, unless the client opts out. The letter noted at the top that the mail package didn't apply to plan sponsors who work with an independent investment adviser. But that notice didn't assuage Schwab advisers. “They clearly knew advisers' clients were going to get this letter because they put in that disclaimer,” said Ken Winans, president and founder of Winans International Inc., who manages about $140 million. He said that he had received no advance notice of the mailing, and that several of his clients thought that Schwab was replacing his advisory service with the two Schwab managed portfolios. “I'm e-mailing you today to apologize for the recent mailing that was sent to retirement plan sponsor(s) with whom you have a client relationship,” Mr. Clark wrote in an e-mail. “In hindsight, it is clear that we should have worked more closely with you prior to communicating directly with the plan sponsor. We understand your role(s) with the plan sponsor, and we attempted to honor that in the letter,” Mr. Clark wrote. That didn't appease Mr. Winans, who thinks that the solicitation was intentional and will happen again. As a result, “We just moved half our assets to TD Ameritrade [Holding Corp.],” he said. The mailing to plans handled by RIAs was “absolutely against our policies,” Mr. Clark said in an interview. “We made a mistake.” The Schwab managed portfolios will not be added to plans handled by advisers, and the firm is contacting advisers and affected clients to explain what happened, Mr. Clark said. Email Dan Jamieson at [email protected]

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