VP—Financial Consultants

VP-Financial Consultants

VP—Financial Consultants
  • What they do 
  • Compensation 
  • What they do 

    VP–Financial Consultants work with clients both in person (through our U.S. branch office locations) and by phone. They develop new and existing client relationships, generally using a planning-based approach to understand a client's needs and objectives. They provide education and recommendations to help clients select the appropriate products—including investments, banking, and insurance—that meet client objectives. Each Financial Consultant supports a practice, which includes clients who are assigned to that Financial Consultant as a primary point of contact. Financial Consultants may also assist clients who are not in their practice.
  • Compensation 

    Financial Consultants receive a base salary for serving clients. Depending on their professional experience and past work performance, some Financial Consultants also receive Relationship Pay. In addition, Financial Consultants receive Solutions Pay. Financial Consultants may also be eligible to participate in a Career Achievement Award Program, which rewards and retains our top talent for being dedicated to Schwab and our clients.

    Financial Consultants may give financial planning and investment advice to some of their clients. Although Schwab as a company may earn more or less revenue depending on the investment product or portfolio management service a Financial Consultant recommends, we have designed their compensation based on the time, complexity, and expertise necessary to understand, recommend, and provide ongoing service to a client for different categories of investment products and portfolio management services.

Relationship Pay

Relationship Pay compensates a Financial Consultant for maintaining relationships with and providing service to clients in their practice. Compensation is divided into three categories. The first two have different asset multiplier rates,* which reflect the time, complexity, and expertise associated with recommending and servicing accounts in each category ("compensation factors"). Category 1 covers fee-based portfolio management services, and Category 2 covers portfolio management referrals and non-managed accounts. The asset multiplier rates change monthly based on fluctuations over time in assets and revenue associated with the products and services in Category 1 and Category 2.

We aggregate within each of these two categories a range of advisory programs or investment products that are similar in terms of complexity and the time, on average, it is expected to take a Financial Consultant to work with a client. We do this to guard against a Financial Consultant having undue incentives when giving investment advice. Relationship Pay applies whether a Financial Consultant recommended or sold the product or service to the client, or the client made the purchase or enrollment decision on his or her own.

As shown in the tables below, Financial Consultants receive more compensation for some products and services than others. Financial Consultants are eligible to receive 6%, 7%, 8%, or 9% of the amount resulting from application of the asset multiplier rate, depending on a Financial Consultant's professional experience and past work performance.

The third category of Relationship Pay is for credit products.

Relationship pay based on account balances

Category 1: Portfolio Management Services
  • Category 1
    Portfolio Management Services (typically have more involved ongoing service needs)
  • Category 1
    Annual Relationship Pay per $100,000 of Client Balances
  • Category 1
    Portfolio Management Services (typically have more involved ongoing service needs)

    Schwab Private Client™

    Schwab Managed Portfolios™

    Schwab Managed Account Services™ (which includes ThomasPartners® Strategies, Windhaven® Strategies, Charles Schwab Investment Management Separately Managed Accounts, Diversified Portfolios, and Third-Party Managers)
  • Category 1
    Annual Relationship Pay per $100,000 of Client Balances

    The asset multiplier rate used for Category 1 could range between 63 and 70 basis points, which is multiplied by a Financial Consultant’s particular payout rate.

     This results in a payment between:

     $37.80 (100,000 x .0063 x .06) and $42.00 (100,000 x .007 x .06),

     $44.10 (100,000 x .0063 x .07) and $49.00 (100,000 x .007 x .07),

     $50.40 (100,000 x .0063 x .08) and $56.00 (100,000 x .007 x .08) or

     $56.70 (100,000 x .0063 x .09) and $63.00 (100,000 x .007 x .09)

Category 2: Portfolio Management Referrals

Category 2: Portfolio Management Referrals
  • Category 2
    Portfolio Management Referrals and Nonmanaged Accounts (typically have less involved ongoing service needs)
  • Category 2
    Annual Relationship Pay per $100,000 of Client Balances
  • Category 2
    Portfolio Management Referrals and Nonmanaged Accounts (typically have less involved ongoing service needs)

    Schwab Advisor Network®

    Schwab Intelligent Portfolios®

    Schwab Intelligent Portfolios Premium™

    Schwab Personal Trust™

    Balances in self-directed or non-managed accounts are treated the same, regardless of whether the assets are in affiliated or third-party products or different share classes. The payout rate is the same for stocks, bonds, mutual funds, ETFs, cash (including Schwab Bank deposits), option positions, and 529 accounts.

  • Category 2
    Annual Relationship Pay per $100,000 of Client Balances

    The asset multiplier rate used for Category 2 could range between 18 and 20 basis points, which is multiplied by a Financial Consultant's particular payout rate.

    This results in a payment between:

    $10.80 (100,000 x .0018 x .06) and $12.00 (100,000 x .002 x .06),

    $12.60 (100,000 x .0018 x .07) and $14.00 (100,000 x .002 x .07),

    $14.40 (100,000 x .0018 x .08) and $16.00 (100,000 x .002 x .08), or

    $16.20 (100,000 x .0018 x .09) and $18.00 (100,000 x .002 x .09)

Category 3: Non-Investment Advice Products and Activities

Category 3: Non-Investment Advice Products and Activities
  • Category 3
    Non-Investment Advice Products and Activities
  • Category 3
    Non-Investment Advice Products and Activities

    Credit Products:

    • Margin Loans
    • Schwab Bank Home Equity Line of Credit (HELOC)
    • Schwab Bank Pledged Asset Line® (PAL)

    Financial Consultants receive a payment of 4.4 basis points per $100,000 of client loan balance. This results in an annual payment of $44 per $100,000 loan ($100,000 × .00044).

*The asset multiplier rate range is based on fluctuations in revenue and assets over time.

When a client in a Financial Consultant's practice is enrolled in a participating portfolio management service and receives a refund of their program fee under the Schwab Satisfaction Guarantee, Schwab will debit the amount of Relationship Pay the Financial Consultant receives by a percentage of the amount of the fee refunded.

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Solutions Pay

Solutions Pay compensates a Financial Consultant for attracting new clients and assets to Schwab and matching client needs with appropriate products and portfolio management services. It is a one-time payment and applies whether a Financial Consultant recommends a product or service or the client makes the purchase or enrollment decision on his or her own. The exceptions are for Schwab Intelligent Portfolios® and Schwab Intelligent Portfolios Premium™, which the Financial Consultant must successfully recommend in order to receive Solutions Pay.

Category 1, asset consolidation, pays the same rate no matter what investment product a Financial Consultant might recommend or a client might purchase on his or her own. Category 2, portfolio management services, pays the same rate no matter which service a Financial Consultant might recommend. The different rates paid between Category 1 and Category 2 are based on the additional time, complexity, and expertise necessary to assess a client’s needs and recommend one of our portfolio management services. Category 3, other products, includes activities in which a Financial Consultant is not providing investment advice. Generally, if assets leave a Financial Consultant’s practice, that loss is netted against asset gains to a Financial Consultant’s practice for purposes of calculating Solutions Pay.

Solutions Pay is paid to the Financial Consultant monthly.

Category 1: Asset Consolidation
  • Category 1
    Asset Consolidation
  • Category 1
    Financial Consultant's Compensation¹
  • Category 1
    One-Time Solutions Payment
  • Category 1
    Asset Consolidation

    Net Asset Flows (total inflow of client assets minus the total outflow of client assets)
  • Category 1
    Financial Consultant's Compensation¹

    0.0008 x Net Asset Flows
  • Category 1
    One-Time Solutions Payment

    $80 per $100,000 of Client Balances

Category 2: Portfolio Management Services

Category 2: Portfolio Management Services
  • Category 2
    Portfolio Management Services
  • Category 2
    Financial Consultant's Compensation¹
  • Category 2
    Compensation¹ One-Time Solutions Payment
  • Category 2
    Portfolio Management Services

    Schwab Private Client™

    Schwab Intelligent Portfolios®

    Schwab Intelligent Portfolios Premium™

    Schwab Advisor Network®

    Schwab Personal Trust—Full Corporate Trustee

    Schwab Managed Portfolios™

    Schwab Managed Account Services™
    (which includes ThomasPartners® Strategies, Windhaven® Strategies, Charles Schwab Investment Management Separately Managed Accounts, Diversified Portfolios, and Third-Party Managers)
  • Category 2
    Financial Consultant's Compensation¹

    0.002 x amount enrolled
  • Category 2
    Compensation¹ One-Time Solutions Payment

    $200 per $100,000 of Client Balances
  • Category 2
    Portfolio Management Services

    Annuities by a Licensed Financial Consultant
  • Category 2
    Financial Consultant's Compensation¹

    0.002 x annuity amount
  • Category 2
    Compensation¹ One-Time Solutions Payment

    $200 per $100,000 of Client Balances

Category 3: Other Products

Category 3: Other Products
  • Category 3
    Other Products
  • Category 3
    Financial Consultant's Compensation¹
  • Category 3
    One-Time Solutions Payment
  • Category 3
    Other Products

    Introductions to Charles Schwab Bank for mortgages by Financial Consultants who are also employees of Charles Schwab Bank
  • Category 3
    Financial Consultant's Compensation¹

    0.002 x loan amount for new mortgages;

    0.0011 x loan amount for refinanced loans
  • Category 3
    One-Time Solutions Payment

    $200 per $100,000 of loan amount

    $110 per $100,000 of Client Balances
  • Category 3
    Other Products

    Schwab Personal Trust – Successor Trustee
  • Category 3
    Financial Consultant's Compensation¹

    $175 per household designation
  • Category 3
    One-Time Solutions Payment

    $175
  • Category 3
    Other Products

    Referrals to a Schwab Charitable donor-advised fund2
  • Category 3
    Financial Consultant's Compensation¹

    $175 per converted referral for new accounts over $25,000
  • Category 3
    One-Time Solutions Payment

    $175
  • Category 3
    Other Products

    Referrals to Life Insurance
  • Category 3
    Financial Consultant's Compensation¹

    $450 per converted referral
  • Category 3
    One-Time Solutions Payment

    $450
  • Category 3
    Other Products

    Referrals to Long-Term Care Insurance by a Licensed Financial Consultant
  • Category 3
    Financial Consultant's Compensation¹

    $450 per converted referral
  • Category 3
    One-Time Solutions Payment

    $450
  • Category 3
    Other Products

    Referrals to Schwab Advisor Services™
  • Category 3
    Financial Consultant's Compensation¹

    $800 for referrals up to$30 million; 

    $3,500 for referrals of $30+ million
  • Category 3
    One-Time Solutions Payment

    $800 or $3,500
  • Category 3
    Other Products

    Referrals to Schwab Retirement Plan Services or Retirement Business Services
  • Category 3
    Financial Consultant's Compensation¹

    0.002 x amount of assets referred; 

    $250,000 minimum asset level to $10,000,000 maximum asset level
  • Category 3
    One-Time Solutions Payment

    $500 for a $250,000 referral

1. Schwab may cap the amount of incentive compensation that a Financial Consultant can earn from any one client from the Solutions Pay component.

2. Schwab Charitable is the name used for the combined programs and services of Schwab Charitable Fund™, an independent nonprofit organization. Schwab Charitable Fund has entered into service agreements with certain affiliates of The Charles Schwab Corporation.

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Bringing Together a Financial Consultant's Pay

As an example, suppose an in-practice client of a Financial Consultant brings a portfolio of $500,000 to Schwab and invests it as follows:

  • $200,000 into Schwab Private Client™
  • $100,000 into Mutual Funds
  • $100,000 into ETFs
  • $100,000 in Cash

The Financial Consultant would earn annual compensation as follows:

Payment Type
  • Payment type
  • Description
  • Compensation Amount  
  • Payment type

    Relationship Pay (annual payments)
  • Description

    $200,000 balance in Schwab Private Client™

    $100,000 balance in Mutual Funds

    $100,000 balance in Cash

    $100,000 balance in ETFs
  • Compensation Amount  

    $75.60–$126.00

    $10.80–$18.00

    $10.80–$18.00

    $10.80–$18.00
  • Payment type

    Solutions Pay (one-time payments)
  • Description

    $500,000 transfer into Schwab

    $200,000 enrollment into Schwab Private Client™
  • Compensation Amount  

    $400

    $400
  • Payment type

    TOTAL
  • Description

  • Compensation Amount  

    $908.00–$980.00