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Charles Schwab has 7,000 Registered Investment Advisors on their network. I want to understand the size of each firm (AUM, number of advisors, number of clients, number of accounts), where they are headquartered, who else they clear/custody with (Fidelity, TD Ameritrade, Pershing, etc.). I want a list of rankings, biggest RIA to smallest. I also want to understand which institutions and broker-dealers custody with Charles Schwab.
Hello! Thanks for your question about Schwab's registered investment advisors. The most useful sources I found to answer your question are Credio.com and SEC's Investment Adviser Public Disclosure website. The short version is that I was able to prepare a spreadsheet of 15 RIAs that use/recommend Schwab as a custodian. This spreadsheet contains the following details: AUM, number of employees, number of clients, number of accounts, headquarters, and custodians. The number of Schwab RIAs with AUMs in the ranges you provided is not publicly available, but, based on the sample used for a 2015 Schwab survey, it appears that Schwab RIAs are distributed in the following manner: less than $25 million (9%), $25 million to $100 million (20%), $101 million to $250 million (21%), $251 million to $500 million (17%), and greater than $500 million (30%). Below you will find a deep dive of my findings.
SPREADSHEET
I was able to come up with the spreadsheet using the following methodology:
1. Checked Schwab's website and saw that it has a "Find a local independent advisor" facility. Entering a zip code will result in a list of RIAs based in the area corresponding to that zip code.
3. Chose a zip code from the list and entered it in Schwab's search facility
5. Clicked on the resulting link to the RIA and copied the following details to the spreadsheet: AUM, number of employees, number of clients, number of accounts, headquarters, and link
6. Entered the firm name in SEC's Investment Adviser Public Disclosure website. Clicked on the resulting link and looked for "Part 2 Brochures" of the RIA's latest filed Form ADV. Part 2 contains information on the RIA's business practices. Not all investment advisors disclose custodian names, though.
7. Searched for "Schwab" in the Part 2 document and checked if the RIA recommends or uses other custodians. Copied the custodians, along with the document URL, to the spreadsheet.
I repeated Steps 3 to 7 until I was able to compile 15 RIAs. To ensure that the RIAs I provided are geographically dispersed, I chose a different state/zip code each time. Also, since the AUM brackets you provided are in the higher ranges, I tried looking for RIAs with higher AUMs. However, most of the Schwab RIAs I have checked versus the Credio.com facility have AUMs that are either below $1 billion or in the range $1 billion to $10 billion.
INVESTMENT ADVISORS IN THE UNITED STATES
The RIAs in the Credio.com facility can be filtered by country and sorted by decreasing AUM. However, it does not contain details about the RIAs' custodians. Nevertheless, I saw that this facility has on record 29,682 US-based investment advisors. Of these advisors, 16 have an AUM of at least $500 billion.
The list of advisors can be filtered by the following AUM ranges:
Under $5M
$5M-$100M
$100M-$500M
$500M-$1B
$1B-$500B
$500B+
I tried filtering the list by each range, but the only time the facility returned a count was when I chose the $500B+ range.
DISTRIBUTION OF SCHWAB INVESTMENT ADVISORS BY AUM RANGE
After an extensive search, I came to the conclusion that the number of Schwab RIAs with AUMs in the ranges you specified is not publicly available. However, I saw a 2015 Schwab presentation detailing the results of a survey the company conducted on its RIAs. Slides 4 and 5 of this presentation show that 872 RIAs were polled and their distribution by AUM size is as follows:
Less than $25 million - 9%
$25 million to $100 million - 20%
$101 million to $250 million - 21%
$251 million to $500 million - 17%
Greater than $500 million - 30%
(I could not ascertain why the percentages do not sum up to 100%.)
Since a sample should be representative of the population for survey results to be reliable, I assume that this sample of 872 RIAs is representative of the population of 7,000 RIAs. With this assumption, it appears that 30% of Schwab RIAs have an AUM of more than $500 million and 58% have an AUM in the range $25 million to $500 million.
If we apply this distribution to the number of RIAs served by Schwab, which is 7,000, then we will get the following numbers:
Less than $25 million - 630
$25 million to $100 million - 1,400
$101 million to $250 million - 1,470
$251 million to $500 million - 1,190
Greater than $500 million - 2,100
I came across the following details, as well, which you might be interested to know. According to Slide 3 of a 2016 Schwab presentation,
1. 35% of Advisor Services assets are from RIAs with AUMs of at least $1 billion
2. 24% of the RIAs with AUMs of at least $1 billion "chose Schwab as sole custodian."
2. Schwab custodies $1,066-billion worth of advisor assets while Fidelity, TD Ameritrade, and Pershing custody $532 billion, $261 billion, and $138 billion, respectively.
CONCLUSION
To wrap it up, I have provided you with a spreadsheet of 15 Schwab RIAs and their corresponding details. It appears from the methodology Schwab used in its 2015 survey that 30% (or 2,100) of Schwab RIAs have an AUM of more than $500 million and 58% (or 4,060) have an AUM in the range $25 million to $500 million.
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