Adam Nash: “Schwab has Become Merrill Lynch”

Adam Nash: “Schwab has Become Merrill Lynch”

March 10, 2015 $bac
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(Last Updated On: January 18, 2017)

Adam Nash, the CEO of, recently made a simple observation:


Schwab has thrown their clients under the bus.

The irony is that Schwab has 4 transcendent values:

  • No conflicts of interest
  • No advice
  • No sales
  • Customers first

But what happened to their “transcendent values” when they filed their recent disclosure brochure?

The document highlights a unique cash-sweep program that could costs clients upwards of 75bps. Moreover, the cost transparency on this setup is on par with the transparency of a covert CIA paramilitary operation.

What happened?

Transcendent values get eaten alive when distribution economics take over. Schwab, like the big banks, cannot maintain a “no conflicts of interest” mantra and simultaneously be a full-scale distribution platform.

The incentives simply don’t add up.

And when in doubt, as Nash so eloquently states, “Follow the money.”

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About the Author

Wesley R. Gray, Ph.D.

After serving as a Captain in the United States Marine Corps, Dr. Gray received a PhD, and was a finance professor at Drexel University. Dr. Gray’s interest in entrepreneurship and behavioral finance led him to found Alpha Architect. Dr. Gray has published three books: EMBEDDED: A Marine Corps Adviser Inside the Iraqi Army, QUANTITATIVE VALUE: A Practitioner’s Guide to Automating Intelligent Investment and Eliminating Behavioral Errors, and DIY FINANCIAL ADVISOR: A Simple Solution to Build and Protect Your Wealth. His numerous published works has been highlighted on CBNC, CNN, NPR, Motley Fool, WSJ Market Watch, CFA Institute, Institutional Investor, and CBS News. Dr. Gray earned an MBA and a PhD in finance from the University of Chicago and graduated magna cum laude with a BS from The Wharton School of the University of Pennsylvania.