According to On Wall Street, Charles Schwab has long said that it doesn’t solicit the investor clients of the financial advisors who custody assets with the firm. It’s a stance it repeated just a month ago when discussing its upcoming franchise program.
Whoops. Last week, Schwab did exactly that, ending an email to its clients' clients pitching portfolio products to retirement plan sponsors who were clients of retail financial advisors and turnkey asset management programs that have custodial relations with Schwab.
The firm apologized, claimed it was an accident, that it never intented to solicit its advisors' clients, and admitted that doing so "that would be a breach of our partnership."
It certainly would be, and advisors who have been damaged by that pitch are surely looking for securities counsel.
