Last month Charles Schwab Corp., the premier destination for self-directed investors, plunged headlong into the advice business by acquiring SoundView Tech- nology Group for $345 million.
Buying the Old Greenwich, Connecticut based boutique allows Schwab to offer clients in-depth research by 50 analysts on more than 200 companies. And Schwab intends to expand coverage beyond SoundView’s current roster of technology, telecommuni-cations, media, aerospace and health care concerns into a broader array of industry sectors. SoundView is shedding its investment banking business, allowing Schwab to maintain its independence from that potential conflict of interest.
“We think that this becomes an important new activity for the company,” Schwab CEO David Pottruck told investors and analysts in a conference call announcing the acquisition, describing it as the next step in a “market wisdom build-out” for Schwab.
Among the other items being offered on what the firm is calling its “research smorgasbord": public policy analysis from the Schwab Washington Research Group; portfolio strategy by Liz Ann Sonders, who joined Schwab last year from U.S. Trust, the private bank that Schwab acquired in 2000; technical analysis from the highly acclaimed John Mendelson; and the computerized Schwab Equity Ratings system, a descendant of Chicago Investment Analytics, which the discount broker acquired two years ago.
