For this month’s blog, we’re introducing Raffa Wealth Management’s preferred custodian, Charles Schwab. As an SEC Registered Investment Adviser, independent of any broker-dealer or custodian, Raffa Wealth Management embraces the ‘Fiduciary Standard’ to act in the best interest of our clients. Our choice to recommend Schwab is based on their extensive history working with RIA’s, dedicated service teams and focus on security.
A History of Working with RIAs
Charles Schwab has been working with Independent Advisers for over 30 years. They were one of the first custodians1 to offer a program specifically designed for Independent Advisers, separating themselves from the traditional broker-dealer model. Although most other custodians have now adopted similar models, Schwab is still the industry leader with 3 out of 4 Independent Advisers with more than $1 billion in assets custodied at Schwab2. (If you’d like to read more about the history of Schwab, the Wall Street Journal recently published the article ‘How Schwab Ate Wall Street’ providing a history of the custodian.)
RWM works directly with Charles Schwab Adviser Services where we have a dedicated service team. Having a dedicated team means that when we need to process a request, or have a question about something, we can pick up the phone and speak with someone directly who is familiar with us and our clients. This dedicated support allows our back-office operations to run more efficiently so that we can focus on supporting our clients.
A Focus on Technology
Schwab provides integrated technology solutions including an online trading platform, adviser portal (Schwab Advisor Center) and client portal (Schwab Alliance). These online resources are available 24/7 with real-time data, allowing us to communicate with clients about the details of their accounts, transfers, and balances immediately.
Additionally, Schwab emphasizes Cybersecurity, providing a dedicated resource center for advisers. The resource center has valuable information about best practices, new or common phishing attempts, and action-oriented tools to help advisers maintain a strong cybersecurity program.
RWM periodically reviews potential custody partners to evaluate the overall quality of the services and support that is provided to clients.
1,2 Source, Charles Schwab, “The Schwab Difference”.
Raffa Wealth Management recommends the use of Charles Schwab based on the services provided by Charles Schwab, such as ability to execute trades, margin rates, on-line access to accounts, transaction charges, duplicate monthly statements, access to mutual funds.
As part of the institutional programs offered by Charles Schwab, Raffa Wealth Management receives benefits that it would not receive if it did not provide investment advice to clients. While there is no direct affiliation or fee sharing arrangement between Schwab and Raffa Wealth Management, economic benefits are received by the Firm which would not be received if we did not have an established relationship with these companies. These benefits do not depend on the amount of transactions directed by the Firm to Charles Schwab. These benefits include: a dedicated trading desk that services the Firm’s clients, a dedicated service group and an account services manager dedicated to the Firm’s accounts, access to a real time order matching system, ability to block client trades, electronic download of trades, portfolio management software, access to an electronic interface, duplicate and batched client statements, confirmations and year-end summaries, the ability to have advisory fees directly debited from client accounts (in accordance with federal and state requirements), a quarterly newsletter, access to
mutual funds, ability to have loads waived for the Firm’s clients who invest in certain loaded funds when certain conditions are met and maintained, and the ability to have custody fees waived. RWM’s full disclosure brochure can be found here.