NEW YORK (TheStreet) - Is your broker working for you or against you? According to David Pottruck, author of Stacking The Deck and former CEO of Charles Schwab (SCHW - Get Report) , many of today's advisors are under pressure to sell their own companies' products.
But that's not how it has to be. Pottruck, the chairman at HighTower Advisors, says his advisors have a fiduciary duty to do what's best for their clients.
That means offering them "an open architecture platform where you have products from all the best sources in the world," he said. Whether that includes the brokerage firms' products or not shouldn't matter. It's all about what's best for the client.
Sometimes, change can be hard to bring about. It requires a "tremendous amount of tenacity," Pottruck said.
Pottruck explained that back in the early 1990s the Internet was just coming to life. Many at the time didn't think that it would really be the next big thing.
But at Charles Schwab, management realized they could "fight or embrace it," he said.
Embracing the Internet took a lot of convincing at the company because employees were concerned that their jobs would be eliminated. But once management got the employees on board, Charles Schwab was able to get ahead of the curve on Wall Street.
That proved to be the right move, and numerous discount brokers have followed in Schwab's path today, including E-Trade Financial (ETFC - Get Report) , TD Ameritrade Holding (AMTD - Get Report) and Interactive Brokers Group (IBKR - Get Report) .
-- Written by Bret Kenwell
TheStreet Ratings team rates SCHWAB (CHARLES) CORP as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate SCHWAB (CHARLES) CORP (SCHW) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins, growth in earnings per share, increase in net income and solid stock price performance. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results."
You can view the full analysis from the report here: SCHW Ratings Report