Weighing In: Why is Schwab Offering Refunds?
Schwab has offered to refund the prior quarter’s program fee to “some” clients who may be unhappy for any reason. See Trevor Hunnicutt’s article Schwab to give unhappy clients a fee refund. I wonder who the “some clients” might be. Why are they unhappy? What percentage of their total clientele is represented by “some” clients? And, why are some clients being offered refunds and other clients are not? Is this a Christmas present to some of Schwab’s long-term clients or is Schwab admitting some type of wrongdoing? Is this a gift or a pre-emptive strike?
I am little suspicious of any Schwab move that ‘appears’ to be investor friendly. This is the same firm that added a forced arbitration clause to its service agreement that bans its clients from joining together in class action suits. It doesn’t sound too investor friendly to me. If 50,000 Schwab clients are damaged by the same act, they have to file 50,000 individual arbitration claims. Schwab knows only a small percentage, who lost the largest amounts of money, will file individual claims. And the best securities attorneys, who might have represented them in a class action suit, will not represent them individually for a contingency fee. Schwab is protecting its own interests, but claims its clients are better-off with this clause in their service agreement.
We may never know why Schwab is offering the refund. It could be a clever PR move or the clients really deserve the refund. If Schwab practiced transparency, instead of public relations, we would know the answer.
Tell us what You think.
Other posts from Jack Waymire
