"There are a ton of advisors out there who are growing, but who don't manage assets directly," he says. "I am serious about the business. I just don't do business the way she thinks I should."
Berg says the fee hike reflects the increased value of Schwab's offerings to independent advisors. "It's our hope that no advisors have to pay this fee," he says. "It can be avoided by centralizing assets with Schwab."
Asked if advisors who just barely meet the $10 million asset minimum will need to worry about fee increases and new minimum thresholds in another few years, Berg adds, "We review fees-for all parts of the business-on an ongoing basis to be sure they are appropriate for the services we provide. However, I can't speculate on future pricing decisions."
Ameritrade, which has targeted small advisors as part of its growth strategy, has seen a surge in calls from advisors over the past few months, says James C. Wangsness, Ameritrade Institutional's senior vice president of Advisor and Correspondent Clearing Services.
In the first quarter ending March 31, the firm saw its advisor clientele grow from 315 to 429, he says. Ameritrade, he says, has achieved operating margins and efficiencies that has allowed it to profitably serve independent advisors with $50 million in assets or less. That includes, he adds, those with less than $10 million. "Others are shooting themselves in the foot and we're taking advantage," Wangsness says.
Another firm likely to benefit from any fallout is the investment advisor division of Raymond James Financial Services, which was launched two years ago and now has more than $1 billion in assets.