Schwab seeks 'jail time' for principal of RIA it fired: How Schwab's firing of a small RIA as a client became a three-year legal ordeal (Part 2)
Michael Kelly reached out to Schwab's counsel via private investigator -- and was answered with a fussilade of restraining orders and accusations of impersonating an advisor
Schwab Spokesperson
A copy of the complete set of facts we provided to RIABiz regarding this story is available here:
http://www.aboutschwab.com/press/statements/11.21.2014
Mister RIA
I wonder if Schwab knows how this makes them look? They should have been nicer.
INORIAS
Why didn’t Kelly move his assets to TD Ameritrade, Fidelity, Pershing or any other custodian? Only $14million in AUM and three years fighting a compliance issue doesn’t make sense. This makes him look foolish (Pride must have gotten the best of him), not Schwab.
Jim Tucker
This reminds me of the movie: Valdes is Coming. While I’m sure Mr. Kelly has some culpability, Schwab is the one really at fault here. There is an obvious pattern that can be gleaned from the compliance data above. It doesn’t take a rocket scientist to figure this out. So smaller firms have a more lax compliance policy than larger firms? Oh, please! One would expect the opposite to be true based on scale alone. Good thing Schwab now has a PR nightmare on their hands. That they have stooped to this level speaks volumes of how they view the RIA community. Regardless of whether the firm is large or small, the RIA community should be on notice that this can easily happen to one of them and their clients.
Kudos to RIA Biz for publishing these pieces. Keep us posted on whether Schwab’s sweet dreams of jail time ever manifest. Good luck on that one! I sincerely hope that RIA firms in general learn from this and review their cozy relationships with the Big Three (Schwab, Fidelity and TD Ameritrade). I’ve never understood why an “independent” RIA would get into bed with these firms in the first place when there are solutions available to the marketplace that provide equal clearing, software solutions, etc. Sure there’s the name recognition, but doesn’t a client decide to do business with you due to the value/philosophy that you bring to the table? And why get into bed with a company that directly competes with you through their own adviser sell-sides?
Good luck Mr. Kelly. I’m in your corner as I hope are many others.
Jim Tucker
This reminds me of the movie: Valdes is Coming. While I’m sure Mr. Kelly has some culpability, Schwab is the one really at fault here. There is an obvious pattern that can be gleaned from the compliance data above. It doesn’t take a rocket scientist to figure this out. So smaller firms have a more lax compliance policy than larger firms? Oh, please! One would expect the opposite to be true based on scale alone. Good thing Schwab now has a PR nightmare on their hands. That they have stooped to this level speaks volumes of how they view the RIA community. Regardless of whether the firm is large or small, the RIA community should be on notice that this can easily happen to one of them and their clients.
Kudos to RIA Biz for publishing these pieces. Keep us posted on whether Schwab’s sweet dreams of jail time ever manifest. Good luck on that one! I sincerely hope that RIA firms in general learn from this and review their cozy relationships with the Big Three (Schwab, Fidelity and TD Ameritrade). I’ve never understood why an “independent” RIA would get into bed with these firms in the first place when there are solutions available to the marketplace that provide equal clearing, software solutions, etc. Sure there’s the name recognition, but doesn’t a client decide to do business with you due to the value/philosophy that you bring to the table? And why get into bed with a company that directly competes with you through their own adviser sell-sides?
Good luck Mr. Kelly. I’m in your corner as I hope are many others.
Fredrica & Ronald Gross
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