Schwab to Go Small for Clients

Charles Schwab Corp. plans to open 54 small offices and assign staff members to help some clients manage their accounts in the brokerage’s latest attempt to hang on to customers seeking personal service.

Schwab, which has cut trading prices twice since June, will offer customers a free personal consultant. The employees won’t provide investment advice and their pay will be partially based on how they do in retaining customers.

“The strategy is part of their effort to cut costs while trying not to negatively impact client relationships,” said Richard Repetto, an analyst at Sandler O’Neill & Partners, who rates Schwab’s shares “sell.”

Charles Schwab, who returned as chief executive in July after ousting David Pottruck, is working to get his company to recover from three years of declining revenue and lost market share to lower-cost competitors.

“Our clients have made clear to us that they want the opportunity to be able to develop a relationship and connect more with an individual,” said Walt Bettinger, who heads Schwab’s branch network.

Schwab’s private-client service remains separate. In that program, investment advisors help customers with financial decisions at a cost of at least $1,000 a year.

Schwab will create the new “satellite” offices by converting 39 of its branches and opening 15 new ones, Bettinger said. They will be staffed by one or two Schwab employees and won’t take deposits or issue checks, services offered at larger Schwab branches. The firm also plans to merge 19 branch offices in metropolitan areas.

Schwab shares rose 14 cents to $10.12 on the New York Stock Exchange.