The franchisees “go through one of the most thorough vetting processes anyone ever goes through in this industry,” Murphy said. “Schwab is understandably very protective of their brand.” She describes her colleagues as a bunch of “go-getters.”
Murphy had a successful career at IBM before moving into financial services. Shepherd worked at Fidelity Investments for eight years, which gave him a good understanding of the discount-brokerage model. Parker had spent a decade as a business development consultant at 1st Global, a broker-dealer that supports CPA firms.
Another factor helping the economics is that many Schwab clients don’t need much help, and franchisees do not manage money. Schwab’s 24-hour phone support can also lighten the load.
All the offices have a client service specialist who works the front desk and handles administrative duties. Branch leaders can add a financial consultant or an associate financial consultant if they’d like. Taucher says the average office has 1.5 positions, plus the branch leader.
“The beauty of this model is you don’t have to do everything” for clients, Parker said.
Shepherd estimates about a fifth of his customers want full wealth management, but echoes other branch leaders in saying the percentage of people wanting more help is growing.
When clients need advanced solutions to more complicated issues, Schwab has the support, branch leaders say. And like traditional branches, franchised outlets also partner with local RIA firms as part of Schwab’s referral network.
“We’re able to partner [with RIAs] without harming our own revenue,” Murphy said.