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 earned a PhD, and worked as a finance professor at Drexel University. Dr. Gray’s interest in bridging the research gap between academia and industry led him to found Alpha Architect, an asset management that delivers affordable active exposures for tax-sensitive investors. Dr. Gray has published four books and a number of academic articles. Wes is a regular contributor to multiple industry outlets, to include the following: Wall Street Journal, Forbes,, and the CFA Institute. 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.