Magazine article American Banker

Schwab Program Focuses on Mass-Affluent Market

Magazine article American Banker

Schwab Program Focuses on Mass-Affluent Market

Article excerpt

Charles Schwab Corp. has introduced a service program for the mass affluent, a market segment that rivals including Merrill Lynch & Co. and J.P. Morgan Chase & Co. are also targeting.

The San Francisco company plans more new offerings, including a private-label credit card to be unveiled by the end of the second quarter through Schwab Bank.

William Atwell, Schwab's executive vice president for client sales and service and banking, said in an interview Tuesday that the bank would partner with one of the large providers of private-label card services, such as First USA (Bank One Corp.'s card unit), MBNA Corp., or Citigroup Inc.

Schwab is evaluating proposals for the business, Mr. Atwell said.

The mass-affluent program, Personal Choice, was unveiled Tuesday at a press conference in New York. It defines the mass affluent as investors with assets of $100,000 to $1 million and subdivides them by services used.

In the interview Mr. Atwell said the program would provide a client base for the card. "You can easily imagine how a bank credit card offer could be built into" Personal Choice, he said.

Mr. Atwell noted that about 16,000 of Schwab Bank's clients for first and second mortgages are existing customers of the retail brokerage. The bank had $2.7 billion of assets at yearend.

Though that arm is focused on a new array of products to attract more customers, he said, Schwab Bank is looking for acquisitions that "add strategic value and make financial sense."

One fit would be a bank with expertise in business and professional services, according to Mr. Atwell. About 20% of Schwab's retail brokerage clients are professionals and small businesses, he said, "so it would be natural to extend banking services" to them. He did not elaborate on specific targets.

At the press conference, founder Charles R. …

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