Deal to help expand firm's managed account offerings as traditional commission biz stays soft
The Charles Schwab Corp. today said it had agreed to buy ThomasPartners Inc., a money management firm with $2.3 billion in assets in a dividend-growth strategy.
The purchase price was $85 million in cash, according to a statement from Schwab.
The deal is expected to close by the end of the year, at which time ThomasPartners will no longer directly market to individual investors.
Gregory Thomas, chief executive at ThomasPartners, and the firm's investment team, will remain in place, the Schwab statement said.
“ThomasPartners' dividend strategy complements Schwab's existing asset management lineup and helps provide our clients with a more complete range of money management solutions,” Schwab chief executive Walt Bettinger said in the statement.
The purchase adds to Schwab's stable of managed account offerings, the most prominent being its Windhaven Portfolios, which runs $12.5 billion in ETF allocation strategies.
Like Windhaven, ThomasPartners' strategies will be made available to Schwab RIAs.
Once the deal closes, Schwab said it will waive commissions for ThomasPartners' managed accounts held in custody on Schwab's Advisor Services platform.
Assets in what Schwab calls “advised accounts,” which includes several managed account programs, stand at $124 billion. Schwab has a total of $770 billion in individual investor assets.
Independent advisers who hold assets in custody at Schwab had $762 billion at the firm as of the third quarter.
With its traditional commission business still in the doldrums, Schwab has been pushing its more profitable managed accounts.
Schwab's net income for the nine-month period ended Sept. 30 grew just 2% over the same period a year ago, with a 3% growth in net revenue to $3.7 billion, the company reported today in a separate announcement.
“We know that this environment continues to impact our clients' confidence in making investment decisions, reinforcing the importance of sustained investment in our full-service model,” Mr. Bettinger said.
