Charles Schwab has walked back plans to directly market its private client services to certain high-net-worth investors who also maintain relationships with independent registered investment advisers (RIAs). As reported by AdvisorHub, the decision followed swift opposition from advisers concerned about internal competition and client confusion.

While Schwab automatically has enrolled its own eligible retail clients into the service tiers since 2023, the planned outreach to advisory clients heightened existing concerns among RIAs.

To justify the proposed outreach, Schwab cited its legal obligation under the Federal Trade Commission Act's Unfair and Deceptive Acts and Practices (UDAP) section to inform clients about available services. AdvisorHub reports that one adviser suggested Schwab could have framed the message differently, encouraging clients to speak with their adviser about available services, rather than promoting its own offerings.

A draft of the proposed letter, obtained by AdvisorHub, welcomed clients with $1 million to $10 million in assets to Schwab Private Client Services. Clients with over $10 million were set to receive a separate letter introducing them to Schwab Private Wealth Services, which included additional benefits like a 100-basis point mortgage discount and access to exclusive events. Both letters were signed by Jonathan Craig, head of Schwab's retail investing unit.

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