Schwab Doubles Fee on Smaller Adviser Accounts

February 13, 2003 ( - In a move that could mean higher fees for plan sponsors who work with investment advisers, Charles Schwab has announced plans to double the service fee it levies on some of the independent investment advisers that do business with the firm.

Schwab said yesterday that the quarterly fee charged to advisers who have less than $10 million in assets with Schwab will be raised to $1,200 from $ 600. Advisers above that threshold are not charged a service fee.

About 1,800 of the nearly 6,000 fee-based advisers that use Schwab’s trade-execution and custody services are under the $10-million threshold, according to Dow Jones, citing a Schwab spokesman.   Still, the higher fee won’t take effect until July 1; if the adviser assets are above the threshold by then, they won’t have to pay the higher fee.

Schwab said that its adviser fees haven’t changed since 1999 and that the higher fee reflects “the increased value of our offering,” according to a statement.

The quarterly service fee will continue to be billed at the end of each quarter, Schwab said. Firms that have been working with Schwab for less than a year won’t have to deal with the increase until their one-year anniversary.