Schwab is a financial firm that provides custody and brokerage services to various types of clients, including registered investment advisors (RIAs) and 401(k) plans. They have experienced double-digit growth in client assets over the past decade, with client assets now exceeding $1.1 trillion. Schwab has also captured an increasing share of the RIA custodian market, which is supported by industry trends of assets moving from wirehouses to RIAs and other independent broker-dealers (IBDs).
The retail customers that Schwab serves have different investment preferences compared to traditional brokerage customers. They tend to invest more passively, buying indexes, mutual funds, and ETFs rather than individual equities. Many of these customers hire Schwab to manage their money. Some customers also utilize robo-advisors for assistance with their financial affairs. These retail customers require more assistance with their financial affairs compared to deep discount brokerage services.
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