Charles Schwab Launches Two ETFs

Charles Schwab Investment Management, Inc. (CSIM), has launched two new exchange-traded funds (ETFs) focused on emerging markets and international small-cap equities.

The Schwab Emerging Markets Equity ETF (SCHE) and the Schwab International Small-Cap Equity ETF (SCHC) began trading on January 14. A press release said the funds feature low operating expense ratios (0.35%) and commission-free online trading in Schwab accounts.

The latest Schwab ETFs are the seventh and eighth in a series of low-cost ETFs Schwab announced in November (see “New Schwab ETFs Offer Low Operating Expense Ratios”).

In addition, Schwab announced that the Board of Trustees of the Schwab ETF Trust approved the termination of the Distribution and Shareholder Services (12b-1) Plan for all proprietary ETFs. This change was filed with the SEC on January 13.

“We’ve eliminated our Rule 12b-1 plan to simplify our pricing and remove the potential additional costs,” said Peter Crawford, senior vice president at Charles Schwab & Co., Inc., in the press release.

Krawcheck Says Pace of Broker Departures Has Slowed

Sallie Krawcheck, head of the global wealth and investment management division at Bank of America (BofA), said reports of brokers leaving in droves are greatly exaggerated, Reuters reported.

While there was some attrition earlier in 2009, Krawcheck said the pace of departures among top-producing financial advisers sank to a “record low” during the fourth quarter. Attrition among the top 40% of brokers, ranked by profits, was half the rate of the best previous year ever, she said.

“Quite frankly, we haven’t seen as much as we would have expected,” she said on a conference call today, according to the news report.

Some reports have cited a trend of financial advisers leaving wirehouse firms to join smaller firms and registered investment advisory (RIA) firms. However, while the pace of advisers going independent might have increased, industry research has found that the largest number of advisers leaving wirehouse firms go to other wirehouse firms (see “Wirehouse Movement Slows in October”).

“Despite what I read about these big attrition rates, it’s not happening,” Krawcheck said. “They’re not going to the RIAs (registered investment advisers) in droves.”

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